Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS (PENSION SCHEMES) BILL

Read the Third time and passed.

BRITISH TRANSPORT DOCKS BILL

As amended, considered; to be read the Third time.

COUNTY OF KENT BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers to Questions — WALES

Common Agricultural Policy

Sir Anthony Meyer: asked the Secretary of State for Wales what representations he has received from farmers' organisations in Wales calling for an end to the common agricultural policy.

The Secretary of State for Wales (Mr. Nicholas Edwards): None, Sir.

Sir Anthony Meyer: Does my right hon. Friend agree that, without the protection afforded by the framework of the common agricultural policy, Welsh farmers would be at the mercy, alternatively, of demands from the Labour party for cheap food from wherever it could be bought, and of pressure from the Treasury to make short-term economies in current expenditure, whatever the damage to long-term interests might be?

Mr. Edwards: I agree with my hon. Friend about the importance of European assistance to our agriculture industry, particularly when the settlement has put about £325 million in a full year into British agriculture. There may be Treasury intransigence under Labour Governments, but that cannot be said of Treasury Ministers of the present Administration in a year in which there has been a substantial financial injection into horticulture and in which the hill livestock compensatory grants have been increased.

Mr. Geraint Howells: Does the Secretary of State not agree that it is better to reform the common agricultural policy than to abolish it?

Mr. Edwards: I am sure that we all agree about the need for further reform and welcome the fact that the total share of the European budget taken by the CAP as well as the British contribution to it has been reduced this year.

I am sure that we all want the reform of the CAP to continue, while accepting its fundamental importance to the health of British agriculture.

Mr. Roy Hughes: Is it not true that farmers over the years have not been particularly wise in their political judgment, as their blanket support for the Conservative Party seems to demonstrate? Is it not time that they realised that the agriculture support system introduced by the post-war Labour Government was far more satisfactory all round? Shall we not have to get back to that system, once a Labour Government take Britain out of the Common Market?

Mr. Edwards: The Labour Party spokesman for agriculture appeared to threaten the whole system of grants for agriculture the other day, so the agriculture sector generally seems to have been wise in its political judgment.

Mr. Best: The hon. Member for Newport (Mr. Hughes) clearly has few farmers in his constituency because he does not appear to speak with authority on their behalf. Does not my right hon. Friend agree that Welsh farmers also benefit greatly from the less-favoured area status in the EEC, a status which my farmers in Anglesey hope will come to them at some stage?

Mr. Edwards: My hon. Friend has been assiduous in his representations on behalf of Anglesey farmers in that connection. I have already told him that Anglesey will be carefully considered in the review of the less-favoured area status in Wales.

Mr. D. E. Thomas: Does not the Secretary of State accept that many farmers are critical of the intervention scheme and would prefer the same scheme to operate for beef as for lamb, since that system is far nearer to the old British system?

Mr. Edwards: No doubt farmers have different opinions about different schemes, as on other issues, but I am sure that they all welcomed the continuation of the beef premium scheme, which is so important for that sector. That scheme, with the better assistance and the lamb premium scheme, provides £300 million of direct benefits for the British consumer. That should not be overlooked.

Dr. Roger Thomas: Is not the main thrust of farmer representation the refusal by Britain to emulate the national stance on agriculture taken by other member States? For example, have not the French subsidised by 50 per cent. turkeys sold in Britain at 36p per pound?

Mr. Edwards: The Minister of Agriculture, Fisheries and Food has made the strongest possible representations to the Commission about that scheme and the Commission is examining it.

Public Works Programme

Mr. Roy Hughes: asked the Secretary of State for Wales if he will consult representatives of the building and construction industry with a view to organising a public works programme to help alleviate unemployment in Wales.

Mr. Nicholas Edwards: There is regular contact between my Department and representatives of the industry. The Under-Secretary of State, my hon. Friend


the Member for Conway (Mr. Roberts), will be meeting the National Federation of Building Trades Employers in July. There is already a substantial capital works programme which benefits the construction industry in Wales and I have no plans for increasing it.

Mr. Hughes: With mass unemployment now sweeping the country, is not such a public works programme with import controls what the country needs? Would not it be better for the Government to concentrate on building houses instead of pressurising local authorities such as Newport to sell prefabs, which is against the public interest?

Mr. Edwards: We note that the hon. Gentleman supports a controlled economy. However, he should not underestimate the scale of the capital programme in Wales. About £100 million a year is being spent on the roads programme, £38·3 million on the Health Service and £47 million on the Welsh water authority. The factory building programme by the Welsh Development Agency, which is of direct benefit to the hon. Gentleman's constituency, is responsible for employing about 3,000 people in the construction industry.

Mr. Wigley: Does the Secretary of State recall his visit to Llanberis a year ago to the major construction scheme by the CEGB at Dinorwic? Where will the 2,000 people who are employed on that scheme and who are to lose their jobs find other work?

Mr. Edwards: As the scheme is phased out, a serious problem will be created. That is one reason why we are pressing on urgently with the A55 programme, which will be of direct benefit to the hon. Gentleman's constituency. I regret that a major part of that scheme—the Bangor bypass—is being held up by one individual's legal challenge.

Sir Raymond Gower: I appreciate the public works to which my right hon. Friend refers, including the factory building by the Welsh Development Agency. However, in future consideration of such matters, will he take account of the fact that the construction and building industries are not largely dependent upon imported materials? Will he also take account of the particular and peculiar problems of smaller builders?

Mr. Edwards: Of course we must take account of those matters. However, we must also recognise that construction programmes, however desirable and wherever they are, must be paid for by taxes and burdens on other parts of industry. One must achieve a balance. It is a myth to think that there is a miraculous cure for our economic difficulties involving capital projects in unspecified terms.

Mr. Tom Ellis: Will the right hon. Gentleman confirm that only one road laying machine has been working in North Wales this winter?

Mr. Edwards: A major road building programme is continuing in North Wales. It is hard to believe that only one machine has been working on that programme, which has been continued successfully.

Mr. Alec Jones: Does the Secretary of State realise that it is extremely difficult to reconcile his figures with the industrial index for production in the construction industry in Wales, which fell by about 16 per cent. last year? There are large stocks of building materials and

thousands of workers in the dole queues. It is difficult to accept the figures. Does the Secretary of State recall that, in the 1930s, many major roads in South Wales were built as a result of public works programmes? Is it not time for an extended public works programme, not only to create employment but to improve the infrastructure, which Wales will need if there is ever an upturn under the present Government?

Mr. Edwards: There has never been such a massive infrastructure programme as that which is being carried out today. It is having a direct benefit on the construction industry. The son of my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) was telling me only this week of the benefits to his company of participating in that massive programme in Wales.

Primary Schools

Mr. Knox: asked the Secretary of State for Wales how much was spent per pupil in primary schools in Wales in each of the past three years.

The Under-Secretary of State for Wales (Mr. Michael Roberts): Net recurrent expenditure per head on all pupils in maintained primary schools in Wales was £338 in 1977–78, £384 in 1978–79 and £446 in 1979–80, at outturn prices. These figures exclude school meals, milk and transport.

Mr. Knox: Does my hon. Friend agree that, if there is a connection between standards and the amount of money spent on education, the figures show that there is no reason why standards should have fallen in the last few years and strong reasons why they should have risen substantially?

Mr. Roberts: Consistently since the Second World War Britain has spent a greater share of its gross national product on education than most of its industrial rivals. Between 1960 and 1980 we increased by 64 per cent. in real terms the amount spent per pupil in primary schools. That increase was not matched by a similar increase in standards.

Mr. D. E. Thomas: Does the Minister accept that his inspectorate has just made a report which clearly shows that standards in primary and secondary schools in Wales are under threat because of the public expenditure cuts forced upon authorities by his Department?

Mr. Roberts: I have read carefully the report by the inspectorate. It came to the conclusion that the fabric of education was intact.

Sir Anthony Meyer: Is not the pupil-teacher ratio as good as, or better than, it has ever been?

Mr. Roberts: The pupil-teacher ratio in Wales bears out the conclusion of the HMI report. It is at its best level.

Dr. Roger Thomas: Did not that HMI report highlight a reduction in the quality and variety of education provision in the primary schools, in rural areas in particular?

Mr. Roberts: No, Sir. The report made it clear that our education standards are being maintained.

Unemployment (Mid-Glamorgan and Gwent)

Mr. Hudson Davies: asked the Secretary of State for Wales what is the percentage increase in the level of


unemployment for the combined areas of Mid-Glamorgan and Gwent since May 1979; and what steps he proposes to take to reduce this figure.

Mr. Nicholas Edwards: The figure is 79·4 per cent. to March 1981, the latest date for which unemployment figures are available on a county basis. Government policies have already achieved a sharp reduction in inflation and improvements in competitiveness. Interest rates are already lower than in most other countries. In addition, the major programme of factory building and regional assistance is already attracting substantial new investments to the area and more can be expected as the economy moves out of recession.

Mr. Hudson Davies: Is the Secretary of State aware that it is an indictment of the Government's failure to tackle the problem that the Labour Party made such inroads in the county council elections in South Wales last week? Is he further aware that the problem will be exacerbated since 5,773 young people on temporary youth opportunities programme work will be back on the labour market and in Mid-Glamorgan alone 11,000 new people will join the labour force in the next five years as a result of the birth boom of the 1960s? Will he tackle that?

Mr. Edwards: If the hon. Gentleman wishes to bandy statistics, I must tell him that the youth opportunities programme has been substantially increased from 7,100 to 10,200 places in Mid-Glamorgan, for example. I am encouraged that there was a sharp upturn in the early part of this year in the number of visits paid by prospective investors in Wales. The Welsh Development Agency has announced that, of the 289 visits made in the 1980–81 financial year, 197 were made since January. That shows a considerable interest in investment in the area.

Mr. Hooson: Will my right hon. Friend tell the House about the increase in unemployment in the same areas during the last Labour Government?

Mr. Edwards: I cannot remember all the statistics, but I well recall that, when the present Leader of the Opposition was responsible for employment in the Labour Government, unemployment in his constituency trebled.

Mr. Alec Jones: Many of the 147,000 unemployed in Wales would welcome a return to the levels of unemployment which obtained under the Labour Government? The figures that the Secretary of State announced today—

Mr. Speaker: Order. The right hon. Gentleman must ask a question.

Mr. Jones: I apologise, Mr. Speaker. Does not the Secretary of State accept that his announcement of a 79·4 per cent. increase in unemployment is a condemnation of Government policies? Is he aware that that condemnation was shared by the people of Gwent and Glamorgan last Thursday when the Tory Party lost 47 seats?
Will the right hon. Gentleman explain to county councils and other councils why the grant-aided capital expenditure on the youth opportunities programme element of the manpower services schemes will in future count against local authority capital expenditure? Why was that change introduced without any discussion with local authorities?

Mr. Edwards: As usual, the right hon. Gentleman asked about three questions in the middle of his speech.

As he takes consolation from the improvement in his party's electoral position in this mid-term period, I hope that he will also take consolation from the more important fact that in Mid-Glamorgan this year eight factories have been allocated and seven more provisionally allocated. There is a widespread interest in new investment and in new job creation in the area.

Job Prospects (Saltney)

Mr. Barry Jones: asked the Secretary of State for Wales if, in view of the proposed closure of the No Nail Boxes Ltd. factory at Saltney with the loss of 150 jobs, he will meet the Alyn and Deeside district council and the Welsh Development Agency to draw up a programme to create new job prospects on the Saltney industrial estate: and if he will make a statement.

Mr. Nicholas Edwards: I shall continue my practice of regular meetings with local authorities in the area. I have recently approved a further programme of factory building by the Welsh Development Agency in the Shotton area amounting to 212,000 sq ft.

Mr. Jones: Does the right hon. Gentleman know that 2,500 redundancies have already been announced this year for the area between Chester and Mostyn in my constituency? In what way can he direct the WDA to bring new work to the Saltney industrial estate? Does he agree that the No Nail. Boxes board behaved in a sneaky and ungenerous manner by not telling its work force of its talks with the Welsh Office about its application for special financial assistance?

Mr. Edwards: Eight factories in Alyn and Deeside have been either confirmed or provisionally allocated this year. The hon. Gentleman will be pleased to know that this morning WIDAB recommended that BICC should be given a grant of £735,000. Subsequently, the boards of BICC and Corning Glassware Inc. have announced that they will go ahead with the project in Deeside to provide 150 skilled jobs, which will bring new technology to the area.

Sir Anthony Meyer: I am proud to say that Mostyn is in my constituency, not in the constituency of the hon. Member for Flint, East (Mr. Jones). Will my right hon. Friend note that that thriving and go-ahead port has gone from strength to strength since it was relieved from the threat contained in the Labour Government's Dock Work Regulation Act 1976?

Mr. Edwards: I am delighted to hear that. Mostyn can be sure that under this Government it will be given every encouragement.

Local Authorities (Manpower)

Mr. Hooson: asked the Secretary of State for Wales what is the range of manpower reductions achieved by Welsh local authorities since May 1979; and whether he is satisfied with progress to date.

The Under-Secretary of State for Wales (Mr. Wyn Roberts): From the end of May 1979 until the end of December 1980, the latest date for which figures are available, local authority manpower in terms of full-time employees and full-time equivalents in Wales has been reduced by about 2 per cent. Although the downward trend


has been encouraging, it must be maintained if Welsh authorities are to meet the public expenditure targets we have requested.

Mr. Hooson: Will my hon. Friend identify the local authority with the best performance and that with the worst performance? Will he confirm that it is possible to achieve substantial economies without undermining local government services?

Mr. Roberts: I do not wish to comment on the performance of individual authorities because their circumstances vary widely. However, while some authorities have been making efforts to reduce their staff, others have not. It is nonsense to suggest that local government services are being destroyed. We are simply asking local authorities to bring down their current expenditure to the level that it was five years ago in real terms, at the time of the last Labour Government.

Mr. Wigley: How many of the full-time equivalents that have been reduced and jobs lost relate to home helps? What additional cost and burden has that placed on the National Health Service?

Mr. Roberts: I do not have a precise analysis of the reduction in manpower. I do not think that the hon. Gentleman expects me to carry them in my head, or even on a piece of paper. Much greater efficiency could be obtained in local government services without their being disrupted.

Sir Anthony Meyer: Does my hon. Friend agree that the need to reduce staff is not a valid reason for refusing to implement the Government's policy on the sale of council houses?

Mr. Roberts: I certainly agree with my hon. Friend. Local authorities have a duty under the Housing Act 1980 to sell to those who have the right to buy. Many local authorities have previous experience of selling council houses. They can also make use of private sector services and change the duties of those already engaged within their housing departments.

Dr. Roger Thomas: Does not the Minister agree that hardly a social services department in Wales has not had to cut back on staff who care for the elderly and those least able to defend themselves? Does he not agree that the loss of such people means a loss of care and a deterioration of services?

Mr. Roberts: I do not agree that there has been a deterioration of services, especially in the social services sector. I have visited every social services department in Wales. I have met directors and chairmen of social services committees. There is scope for greater efficiency in that area, as there is elsewhere.

Economic Policy

Mr. Wigley: asked the Secretary of State for Wales if he will make a statement on the effect of the Government's economic policies on Wales.

Mr. Nicholas Edwards: The massive programme of factory building, infrastructure improvement and financial support for industry has been designed to cushion the worst effects of the recession and assist change. As a consequence, even in the last year we have been able to attract a large number of new investments and with the

general improvement in competitiveness and good industrial relations in Wales we are now well placed to take advantage of the recovery.

Mr. Wigley: Will the Secretary of State name one policy that has actually worked for Wales?

Mr. Edwards: There is no doubt that the improved competitiveness of British industry provides the greatest chance of success in the world. People will buy our goods only if we are competitive and if they want to buy them. The improved competitiveness throughout British industry is the most hopeful factor for the industrial recovery of Britain.

Sir Raymond Gower: Does not my right hon. Friend have evidence that many overseas visitors have been greatly impressed with the building of new factories and the clearance of sites in many parts of industrial Wales?

Mr. Edwards: There has been not only a great appreciation of the industrial sites that we are able to offer, but recognition of the excellent industrial relations in many of the existing plants in Wales. I am glad to say that the senior management of Inmos told me only this week that they are having no difficulty in attracting the highly skilled personnel that they need for their plant in Wales. That augurs well for the future.

Mr. Ioan Evans: Have not the Government's economic policies had disastrous effects on employment prospects, with a more than 80 per cent. increase in unemployment in Mid-Glamorgan since the Secretary of State took office? Will he seek to restore to those areas the special development area status of which they have been deprived by the Government's policies?

Mr. Edwards: The future prospects of the area lie in the attraction of inward investment and the growth of companies. It is encouraging that companies such as Yuasa are setting up operations, that such companies as Smiths Industries are transferring new work to Ystradgynlais and that many other encouraging developments are taking place.

Mr. Garel-Jones: Will my right hon. Friend confirm that one of the specific areas in which the beneficial effects of Government economic policy may be seen is the Llanwern steel works, where the level of productivity is equal to, or better than, most of our competitors in Europe?

Mr. Edwards: It is that fact that gives that steel works a real chance of survival in a highly competitive world industry.

Mr. Alec Jones: Does the right hon. Gentleman agree that if he gave a complete answer on the effect of the Government's economic policies in Wales it could be summed up in one word—"disastrous"? That was the judgment passed on him and his Government last Thursday. It is a judgment that will be echoed by most political parties in Wales and by most organisations. The only people in Wales who support the Government's policies are Tory Ministers and some Tory Members. Will he now answer the supplementary question that I asked him previously? Why has there been a change in policy for the capital expenditure of local authorities on MSC schemes? The right hon. Gentleman has boasted about the schemes but the change will place many of them in jeopardy.

Mr. Edwards: While the right hon. Gentleman sells Wales short once again, overseas investors such as Mitel are expressing their confidence in the future.

Steel Areas (Industrial Development)

Mr. Best: asked the Secretary of State for Wales what part of the £48 million allocated for industrial development in the steel areas of South Wales was due to be spent in 1980–81; and how much was actually spent.

Mr. Nicholas Edwards: A total of £24·8 million was to be spent during 1980–81—£21·7 million by the Welsh Development Agency and £3·1 million by the Cwmbran development corporation. Both bodies spent their full allocation.

Mr. Best: Will my right hon. Friend try to extract at least some grudging praise from the Jeremiahs of the Opposition in an acknowledgement that this is the largest investment programme for Wales that has ever been seen in the Principality? Will he go further and convince the people of Wales that there will be the same level of investment for the Principality next year? May I ask him to give that commitment today?

Mr. Edwards: My hon. Friend is aware that we had approximately half of the special programme in the first year and that there will be a substantial programme in the coming year. I was hoping that I would extract from the Opposition an apology for their early-day motion tabled earlier in the year in which they confidently forecast that there would be an underspend in the £24·8 million programme.

Mr. Roy Hughes: Are not these figures a flea bite compared with the calamitous proportions that unemployment has reached? Does the right hon. Gentleman agree that the people are fed up with the Government's economic policies, as the county council elections clearly revealed last Thursday? Will he bear in mind that in a steel making area such as Newport only one Conservative candidate was returned?

Mr. Edwards: The hon. Gentleman may consider that the figures amount to a flea bite. However, his constituency is getting a large chunk of the capital programme that is being spent. It has benefited considerably by the arrival of some major new industries. I wonder whether his judgment will be shared by the many people who will be gaining employment in his constituency as a result of the Government's spending programme.

Mr. Alec Jones: We welcome the right hon. Gentleman's statement about Government spending. Will he inform the House how much of that money was spent on building and how much on the acquisition of land?

Mr. Edwards: Of the detailed programme that was announced by the Government at the beginning of the year, in which we set out the allocation, 90 per cent. of the factory space that was announced is under construction and the remainder will shortly be started. As the right hon. Gentleman knows, there is a substantial building programme. I suppose that I must take his intervention as his apology for making such an absurd allegation earlier that we would not spend the money that needed to be spent.

Jobs

Mr. Geraint Howells: asked the Secretary of State for Wales how many jobs have come to Wales since May 1979; and how many jobs have been lost in the same period.

Mr. Nicholas Edwards: Comprehensive information is not available on job gains and losses. An indication of net changes in employment levels can, however, be gained from the Department of Employment's quarterly estimates of employees in employment. Latest available figures indicate a net decrease between June 1979 and December 1980 of 80,000.

Mr. Howells: In view of the seriousness of unemployment in Wales, may I ask the right hon. Gentleman to say what advice he will give to school leavers this summer, besides advising them to cross the border to England to find work?

Mr. Edwards: Unemployment in Wales is serious. That is why we have the massive programme that I have been describing. I am glad to tell the hon. Gentleman that there has been no increase in the percentage of unemployment represented by school leavers. I advise school leavers to continue to provide themselves, especially while at school, with the skills that are best suited for modern industrial development and for the modern techniques that will increasingly be so important.

Mr. Anderson: Does the right hon. Gentleman recall that when, about a year ago, the economic department at Bangor university predicted that there would be unemployment of 147,000 in. Wales by the end of the year and 172,000 at the end of 1983, the forecast was greeted with official scorn? The first figure has already been exceeded, showing that it was a serious underestimate. Does not this call for a major programme of regional activity and investment, which this Government will not initiate?

Mr. Edwards: I did not comment on the forecasts that were made about a year ago. I do not propose to make a forecast now. As I have said repeatedly, we are undertaking the most substantial programme of site development and infrastructure preparation in Wales chat has ever been undertaken by any Government.

Mr. Best: Is my right hon. Friend aware that we all welcome the 43,000 places that are being made available for the youth opportunities programme this year, which means that the Government have doubled the number of places in the scheme since they came to office? No doubt he will accept that that is not a panacea for the ills of youth unemployment. Will he continue to press my right hon. Friend the Secretary of State for Employment to investigate and move towards a scheme of vocational preparation for young people that will take them immediately they leave school—[Interruption.]—so that they may be better fitted for the needs of industry?

Mr. Edwards: Amid the yowls and yaroos of Opposition Members, which they have been practising recently in the capital's streets instead of in the House, my hon. Friend was making an important point. We must concern ourselves with vocational training and continued retraining so that skills are adapted to new requirements. My right hon. Friend and I are currently considering


detailed proposals to improve the arrangements and I hope that it will not be long before further announcements are made.

Mr. Rowlands: Does not the right hon. Gentleman's bluster this afternoon expose the fact that the Government's policies are no answer for the problems of Wales? Does he accept that 80,000 jobs have been lost in the Welsh economy as a result of the Government's policies? Instead of talking about inward investment, important though that is, and new factory building, what is he going to do about the 300,000 sq ft of empty factory space at Merthyr Tydfil, a direct victim of imported goods from within the EEC—namely, from Italy? What is his answer to that?

Mr. Edwards: I am glad to observe that rates of absenteeism at Hoover's—

Mr. Rowlands: Answer the question.

Mr. Edwards: As usual, the junior Member for Bolsover never listens to an answer. I was about to say that I welcome the fact that in the recent past rates of absenteeism at Hoover's have fallen to their lowest level ever and are a great improvement on anything that has been achieved in the past. They are down to about 5 per cent., when they used to be about 15 per cent. That is the greatest single hope and prospect for the company's recovery.

Public Expenditure

Mr. Ioan Evans: asked the Secretary of State for Wales what representations he has received from local authorities in Wales regarding Government cuts in public expenditure.

Mr. Nicholas Edwards: I have received a large number of representations from local authorities in Wales regarding public expenditure cuts since I have been in office.

Mr. Evans: Does the Minister realise that the increase in local authority rates and the cutback in a number of services are due to the policies which have been pursued by the Government and that on Thursday last week the massive Labour gains and the massive Tory losses were an indication that the people do not support the Government's policies on local government?

Mr. Edwards: I am sure that the hon. Member will want to get what consolation he can at this time, with the dereliction of his own party. He is welcome to it.

Sir Raymond Gower: As Opposition Members have been making use all afternoon of the barometer of last week's elections, is it not a fact that when the Labour Government were in office the local government losses suffered by the Labour Party were much larger?

Mr. Edwards: It is true that not only the local government losses but the swings in opinion polls reached record proportions when the Labour Party was in office. It is much more significant that there has not been one constructive proposal of any sort from the Opposition Benches this afternoon.

Mr. Coleman: On a point of order, Mr. Speaker. Are you aware that a number of Welsh Members have been prevented from asking supplementary questions this

afternoon because of the length of questioning and because of the number of times certain individuals have been called?

Mr. Speaker: I understand the hon. Gentleman. However, as there is only one question to the Church Commissioner, with a bit of luck, we shall return to Welsh questions after that.

HOLY ORDERS (REMUNERATION)

Mr. Viggers: asked the hon. Member for Wokingham. as representing the Church Commissioners, if he is satisfied with the current method of remuneration of those seeking Holy Orders.

The Second Church Estates Commissioner (Mr. William van Straubenzee): The use of the commissioners' income is governed by statute and is primarily available towards the pay and housing of the clergy and the provision of their pensions. The commissioners themselves are not empowered, for example, to give financial assistance towards the maintenance of ordinands through the period of their training.

Mr. Viggers: Does my hon. Friend agree that, whereas ordinands can normally obtain grants, there is no such general system for the funding of their families, which can result in real hardship because the families must rely on what is available from charities and individual dioceses? Does my hon. Friend agree that in the less-well-endowed dioceses that results in hardship? Does he agree that a fairer system would be to have a general national system for remuneration of ordinands' families?

Mr. van Straubenzee: I should be happy to examine any case my hon. Friend had in mind. In essence, when a man is sent forward for ordination, he is the responsibility of the diocese in question. That responsibility is gladly accepted. He is often supported by a variety of sources, some of which have been mentioned by my hon. Friend. One is the Train a Priest appeal which appears in the Church Times, which I warmly appreciate. It is the established policy of the Church of England that no man, once he has been selected, shall be prevented from undertaking training for lack of money.

Oral Answers to Questions — WALES

Housing Expenditure (Cuts)

Mr. Anderson: asked the Secretary of the State for Wales what information he has on the practice of Welsh local authorities in respect of improvement grants as a result of the Government's cuts in expenditure for housing.

Mr. Wyn Roberts: Apart from certain mandatory grants governed by statute, local housing authorities have discretionary powers to award grants. I am aware that some authorities have said that they intend to suspend or restrict discretionary grants, though they are aware of the importance the Government attach to the improvement of our housing stock.

Mr. Anderton: Is the Minister aware that many local authorities are not now giving discretionary grants and that that has put the clock back a decade in Wales? Is he aware that unfit homes which have the standard amenities are not


now able to receive grants and that the housing action areas which he has declared are of no use because no money is available in many authorities to give residents the cash to improve their homes?

Mr. Roberts: I have visited housing authorities in Wales and I have stressed to them the simple point that they can increase their housing allocations by the sale of council houses and increase their net receipts. That is why we want them to sell council houses, so that they can increase their allocations. They are free to apply that increase to improvement grants.

Water Policy

Mr. Coleman: asked the Secretary of State for Wales when next he expects to meet the chairman of the Welsh water authority to consider the future water policy for Wales.

Mr. Wyn Roberts: I shall be brief. I meet the chairman of the Welsh water authority from time to time, but arrangements for the next meeting have not yet been made.

Mr. Coleman: Is the hon. Gentleman aware of the anger in many parts of Wales, particularly in West Glamorgan, over the recent heavy water charges which have been introduced? When he meets the chairman, will he discuss with him the justification for the standing charge of £9 per household for water, particularly when those charges are levied on the basis of rateable value and not on the basis of consumption?

Mr. Roberts: The hon. Gentleman will know that my right hon. Friend arranged, with the Welsh water authority's co-operation, for a team of independent accountants to examine the authority's books and to suggest whether a reduction in charges could be achieved. I am satisfied that the lower level of increase subsequently announced by the authority, amounting to an average rise of 14·8 per cent. in domestic bills, compared with the 20 per cent. originally proposed, is the minimum necessary to maintain an acceptable standard of service.

Oral Answers to Questions — HOUSE OF COMMONS

Palace of Westminster (Staff)

Mr. Canavan: asked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, how many people are employed in the Palace of Westminster.

Mr. Victor Goodhew: I have been asked to reply.
The number of staff employed in the six Departments of the House is 902. The Commission is not responsible for other persons employed in the Palace of Westminster.

Mr. Canavan: Why has the Commission unilaterally broken off the grading review consultations that it was having with the trade unions representing its employees, especially when the consultations were in their final stages and when an appeal was being considered? Is not that deplorable, shabby treatment for the House of Commons Commission to dish out to its employees? Has the appeal system also been scrapped?

Mr. Goodhew: The hon. Gentleman has misunderstood the situation. Those who are involved in the

discussions understand precisely what is going on. If there are any points which the hon. Gentleman wishes to draw to the attention of the Commission, he should write to me about them and I shall let him have an answer.

Refreshment Department (Staff)

Mr. Cryer: asked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, what is the total number of staff in the Refreshment Department.

Mr. Goodhew: I have been asked to reply.
The total number of staff employed in the Refreshment Department is 244.

Mr. Cryer: Will the hon, Gentleman confirm that a fair proportion of that 244 is employed in the private dining rooms and that the private dining rooms have received a subsidy? Are there any plans to publish the bookings of the private dining rooms so that hon. Members are made aware, if they so wish, whether the private dining rooms are being used by outside lobbying and public relations organisations? Is the hon. Gentleman aware that at the moment those bookings are not available and there is a strong suggestion that that is because of a covering of such lobbying?

Mr. Goodhew: I shall take note of what the hon. Gentleman has said. I remind him that fewer than one-third of those who use the Palace of Westminster catering facilities are the responsibility of the Commission.

Mr. Heddle: Will my hon. friend confirm that it is still the policy of the Refreshment Department, wherever possible, to buy British and that the recent appearance of the glass water jugs marked "Made in Poland" is simply a recognition of the sea change which is taking place in that country?

Mr. Goodhew: That matter has not come into my purview. I believe that the country of origin would be acceptable to most hon. Members.

Mr. Freud: Is the hon. Gentleman aware that the Refreshment Department employs two and a half times as many people as the Department of the Library and that, to date, not one of them has married a Member of Parliament? Will the hon. Gentleman tell the House where the Refreshment Department has gone wrong?

Mr. Goodhew: I am not responsible for the fact that none of them has married a Member of Parliament.

Mr. English: I presume that the last question related to the Financial Secretary to the Treasury, who is married to an ex-member of the Library staff.
Does the hon. Gentleman accept that it would be desirable if the printers of House of Commons papers were placed in the same position as members of the Refreshment Department staff? The Refreshment Department was rightly taken into the purview of the Commission, which was an excellent idea. Our papers might be produced a little better if we took control of our printers as well.

Mr. Goodhew: I note what the hon. Gentleman says. I shall see that those concerned deal with the matter expeditiously.

Mr. Christopher Price: The hon. Gentleman is a Commissioner.

Mr. Goodhew: Indeed, I am, and I am doing my best to make it clear that I accept the responsibility with dignity—I hope.

Oral Answers to Questions — EDUCATION AND SCIENCE

Minister of State (Speech)

Mr. Aspinwall: asked the Secretary of State for Education and Science if he will place a copy of the speech of the Minister of State for the Arts to the Council of Regional Arts Associations on 15 April in the Library.

The Minister for the Arts (Mr. Paul Channon): Yes, Sir.

Mr. Aspinwall: Will my right hon. Friend ensure that more support is given to the arts in the regions, especially in the South-West, instead of so much support going to the London area?

Mr. Channon: The regions should have a large slice of the money spent on the arts, and I am pleased that the proportion has been increasing in recent years. The level of artistic activity in the South-West is very high indeed. It is one of the best areas in the country.

Mr. Faulds: Is not the answer to impose on local authorities a mandatory requirement to raise a specific rateage for arts and heritage purposes, to be used through the regional arts associations?

Mr. Channon: I am against a mandatory rate for the arts. I am in favour of people supporting the arts as generously as possible, but a mandatory rating system would not be consistent with local democracy.

Mr. D. E. Thomas: Would not resources be more effectively distributed if the Arts Council was relieved of the burden of dealing with individual clients and there was an overall allocation of resources to regions?

Mr. Channon: A great deal of discussion is going on about whether more discretion should be given to regional arts associations. A working party has been set up by the Arts Council, local authorities and others concerned, and I have discussed the matter with local authorities. I hope that progress can be made.

European Community (Ministers of Culture)

Mr. Iain Mills: asked the Secretary of State for Education and Science if he will make a statement on the recent discussions with the European Ministers of Culture.

Mr. Channon: The European Ministers of Culture met last week. There was general agreement that within the available resources of member countries we would all work together to further steps for European cultural co-operation.

Mr. Mills: What progress has been made towards designating 1985 as European Music Year, and what part will Britain play?

Mr. Channon: There is general agreement throughout Europe that it would be a good idea to have 1985 as European Music Year, as it is the tercentenery of the birth of Handel, Bach and Scarlatti. It was agreed in principle at the meeting last week. We shall play our part with enthusiasm, and I await my hon. Friend's suggestions.

Arts (Select Committee Report)

Mr. Cormack: asked the Secretary of State for Education and Science when he will be in a position to reply to the Select Committee report on the arts.

Mr. Channon: The recommendations in the Committee's interim report on works of art require consultation among a number of Departments, but the Government will, of course, aim to reply as soon as practicable.

Mr. Cormack: I thank my right hon. Friend for that reply. May I urge him to have discussions as quickly as possible? Will he ensure that we have a reply before the House rises for the Summer Recess? Is he aware that this important report is unanimous?

Mr. Channon: The report is important, and it is a great tribute to the members of the Committee that it is unanimous. I shall do my best to accede to my hon. Friends request, although the remedy is not entirely in my hands.

Mr. Faulds: Is the right hon. Gentleman aware that he will enjoy all-party support if he can deliver Government decisions along the lines of those sensible and constructive recommendations in the report; and that ready acceptance of the recommendations would meet with a especial welcome from the National Art Collections Fund, which has a long and splendid record in helping public acquisitions in galleries?

Mr. Channon: I agree with the hon. Gentleman's latter remarks. I note his support for the report, which will strengthen the hand of those who advocate its total adoption. I shall attempt to meet the wishes of the House.

Arts (Business Sponsorship)

Mr. Blackburn: asked the Secretary of State for Education and Science if he is taking any additional steps to encourage business sponsorship of the arts.

Mr. Channon: I shall continue to take every available opportunity to encourage business sponsorship of the arts, and I have a number of regional engagements planned in which I intend to emphasise the relevance of sponsorship to the smaller arts and business organisations. A booklet to help arts organisations frame sponsorship proposals will be published later this year and I intend to hold a reception in London during the summer to bring together representatives of some sponsoring and non-sponsoring major companies.

Mr. Blackburn: I particularly welcome my right hon. Friend's announcement about the booklet to be published later this year. Will he vigorously pursue the prospect of sponsorship by companies hiring pictures from local galleries, particularly in view of the Select Committee's report?

Mr. Channon: I am most grateful to my hon. Friend for his interest, and I shall adopt his suggestion.

Mr. Freud: Will the Minister bear in mind the existence of the Honours List and bring it to the attention of potential art sponsors, who are as keen as ever to receive titles?

Mr. Channon: I note the hon. Gentleman's interest, and I shall give his suggestion the consideration that it is worth.

Mr. Sainsbury: Will my right hon. Friend ensure that national and local media are not reluctant to give due reward to businesses that sponsor the arts? Will he ensure that the BBC, for example, is not reluctant to mention sponsorship in case it constitutes advertising?

Mr. Channon: That is a good point. It is an important topic which has been raised frequently. I shall discuss the matter with the BBC and others. Great progress has been made, and I hope that we shall make further strides forward.

British Film Industry

Mr. Freud: asked the Secretary of State for Education and Science what encouragement his Department currently is giving to independent British film-makers.

Mr. Channon: Within my sphere of responsibility, support for independent British film producers is provided by the production board of the British Film Institute. I am pleased to say that the grant-in-aid to the institute for 1981–82 includes a substantial increase for this work.

Mr. Freud: Is the Minister aware of the extreme difficulty for the private sector of the film industry in getting its films distributed? Will he see whether he can do something to help?

Mr. Channon: That is more a matter for the Secretary of State for Trade. My responsibilities in the film industry are limited. The Department of Trade deals with the film industry as a commercial industry. My responsibilities are limited to the British Film Institute, but I shall draw my right hon. Friend's attention to what the hon. Gentleman has said.

Mr. Cryer: Will the right hon. Gentleman encourage independent film production in this country by making more money available to the BFI? Will he accept that his responsibility is not entirely separate from that of the Department of Trade and encourage his colleagues in that Department to make more money available to the National Film Finance Corporation? Will he also bring pressure to bear on television companies to help independent feature film production here?

Mr. Channon: The matters that the hon. Gentleman raises are partly the responsibility of my right hon. Friend, and I shall mention them to him. The British Film Institute has set a net budget for the production board of about £700,000 this year, which will permit about six low budget feature films and eight low budget experimental films to be made, which is a step forward.

Mr. Faulds: Will the right hon. Gentleman discuss with his colleagues in the Department of Trade, first, the nonsense that films are placed in that Department? Secondly, will he discuss the need to fund British film-making by imposing a levy on the televising of feature films, which would be an easy way to bring funds to the film industry?

Mr. Channon: I shall certainly discuss the first matter, but, unfortunately, so far the allocation of Government responsibilities is not among my duties. The second part of the hon. Gentleman's question is a matter for the Secretary of State for Trade, and I shall discuss it with him.

Public Lending Right

Mr. Moate: asked the Secretary of State for Education and Science what is his estimate of the number of authors who would be eligible to register for public lending right.

Mr. Channon: An estimate of 50,000 eligible authors has been used as the basis for planning but no precise figures are available. The number registering may well be substantially fewer.

Mr. Moate: If my right hon. Friend is in the business of setting up quangos—which I hope he is not—and if he should ever institute a scheme of public lending right, what would be the likely average payment to each author for every £1 million of taxpayers' money expended?

Mr. Channon: I am indeed enthusiastically looking forward to the introduction of public lending right. I know that this is one of the very few issues on which my hon. Friend and I are not in agreement, but the House has decided by a large majority that public lending right should be introduced. I ask my hon. Friend to await the consultative document which will, I hope before too long, be available to the House.

Mr. Faulds: Will the right hon. Gentleman reiterate that this will be introduced before long, as the Government has been tardy in declaring its intentions on this matter? When will he make a public statement about the introduction of the scheme and exactly how it will be run?

Mr. Channon: The consultative document will be published before very long and the hon. Gentleman will then be able to see. In fact, we are at the stage of appointing the registrar. I hope that he will be appointed very soon. The prime responsibility for actually getting on with the scheme, once Parliament has approved it, will be his. But there will be no undue delay.

Lead Pollution

The Minister for Local Government and Environmental Services (Mr. Tom King): With permission, I will make a statement on Government action on environmental pollution by lead.
The Government have now completed their review of policy, in the light of the report by the working party, under the chairmanship of Professor Lawther, set up by the then Secretary of State for Social Services. The Government accept the general conclusion of the report that current policy needs to be tightened in a number of respects, building on what has already been achieved.
The report makes clear the need to improve our knowledge of the effects of lead in our environment, and particularly of possible effects on children's intelligence. Some studies have been completed on this, and more are in hand. The Government have invited the Medical Reseach Council to commission a major study in this area.
The report emphasises the importance of a comprehensive approach towards tackling the problems of lead pollution. I have placed in the Vote Office a paper outlining the Government's response to the detailed recommendations in the report. In this statement I shall deal with the main points.
First, on the subject of paint, the real problem is not paint currently on sale to the public—most of which is virtually lead-free—but old paintwork in many houses and other buildings. This will be tackled by information and advice to local authorities, and by increased emphasis in health education programmes on ways to counter the hazards. There will be early discussion with the local authority associations on this and on other matters concerning local authorities.
Secondly, with regard to water, high levels of lead can occur in drinking water in some areas. The problem arises only in the minority of households that have both lead-solvent water and lead plumbing. Water authorities have been working to identify the problem areas and are taking steps to tackle the problem at source. This work is being pressed ahead as rapidly as possible. Meanwhile, water authorities, local authorities and area health authorities are being asked to co-operate to provide information and advice to people who may be affected.
In some cases, and particularly where drinking water comes from lead-lined tanks, the only answer is to alter the plumbing. The Government propose that such work should be eligible for home improvement grants. This will be considered in consultation with the local authority associations. My right hon. Friend will be taking corresponding action in Scotland, where there is a particularly severe problem in those areas where lead-lined tanks are common.
Thirdly, in relation to food, new regulations covering the maximum permitted levels of lead in food offered for sale came into force last year. The Food Additives and Contaminants Committee has already been asked to study the implications of the use of lead solder in cans in its study of metals in canned foods.
Finally, on emissions of lead to air, the Lawther report recommends an air quality standard for lead of 2 micrograms per cubic metre. The Government agree that this standard, which is also proposed in a draft European Communities directive, should be adopted.
On the control of industrial emissions, current powers are adequate to allow the proposed standard to be met.

But, as the figures quoted by Lawther show, the standard cannot be met in some areas of heavy traffic. Petrol-lead emissions may also result in high levels of lead in dust, and may contribute to lead in food.
The Government have decided that the maximum permitted lead content of petrol should be reduced as far as is possible, without ruling out the continued use of car engines of present design—that is, from the present limit of 0·40 grams per litre to 0·15 grams per litre. This will reduce by about two-thirds lead emissions from cars some 10 years earlier than any other practicable method.
The aim will be to introduce the new limit not later than the end of 1985. The oil industry will need to install substantial new plant in order to produce the new low-lead petrol in sufficient quantities. We shall discuss the practical requirements with the industry. There will in time be some increase in the cost of producing petrol, but we believe that such extra costs are reasonable in relation to the environmental benefits of an early and substantial reduction in lead emissions.
Professor Lawther's report warned of the need to take further effective action to deal with lead pollution. The measures that I have announced today show the Government's acceptance of the importance of his report and our intention to take all necessary steps to reduce the hazards arising from lead in our environment.

Mr. Denis Howell: We welcome the concern of the Government and the steps that have been announced, but is the Minister aware that the Opposition are extremely disappointed on the main issue of principle, namely, lead in petrol? We believe that this is the wrong decision, given the two options before the Government of either reducing the maximum to 0·15 grams per litre or going for lead-free petrol immediately. We believe that the latter decision should have been taken now. Is it not inevitable that the environmental and health considerations and the developing public opinion on the subject will combine to make that part of the Government's decision obsolete well before it is implemented? The Opposition will certainly go for lead-free petrol. We believe that it would have been better to give industry and the motorist the necessary time to adjust to that fundamental decision.
We welcome the Minister's announcements on food, water and paint, but as the Government have cut back resources for the water authorities, can the Minister assure us that the authorities will have the resources to meet the costs, which are likely to be substantial, especially in the older cities? Is it adequate to offer a 50 per cent. grant to people living in the centres of old cities such as Glasgow and those in Lancashire? Should not this cost be undertaken by the whole community? What will be Government's response if large numbers of those citizens say that they cannot afford to replace their lead pipes or tanks?
Why, too, has there been the political delay of 18 months before the Minister's announcement today? The Labour Government reduced the amount of lead in petrol on four occasions. We set up the Watlip inquiry that reported in July 1979, and the Lawther working party which reported in March 1980. It is clear from all the leaks over the past year that there has been a departmental dog-fight within the Government, in which the Treasury has routed the Department of the Environment and the


Department of Health and Social Security. The House itself has not been consulted. Certainly, we shall wish to have a debate at an early opportunity.
On the question of health, I am sure that the Minister will agree, as he said in his statement, that the absorption of lead into the body by any means is an evil that we should not discount. Even since the Lawther committee reported, two of its members—Doctors Lansdown and Yule—have produced further significant information, which suggests that the decision to go for lead-free petrol ought to be taken now and that the major study that the Minister has announced can only be described as a further development of the policy of procrastination that seems to have been pursued over the past year or so.
Finally, does the Minister agree that the whole of industry would prefer the major decision to be taken now? We shall get the worst of both worlds by reducing the maximum to 0·15 grams per litre in 1985 and then having the further expense of going to a zero level later. The decision is not in the interests of the motor industry or the oil industry, and it is certainly not in the interests of future generations of young children. We must therefore register our grave disappointment with it.

Mr. King: I am well aware of the right hon. Gentleman's long interest in this subject. Having replied on behalf of the previous Government and been unable to announce much progress, I appreciate that he feels a certain frustration at having to respond to my statement.
It is a little unfair to accuse the Government of taking 18 months to respond to a report that was published only a year or so ago. The right hon. Gentleman will be aware that it is the Lawther report to which I am responding.
At this stage it is not possible to indicate the costs that will fall on the water authorities. The first aim of the water authorities is either to change the sources of what is called plumbo-solvent or lead-solvent water or to treat the water. In every case, that need not necessarily be an expensive process. It is only if those two options fail that one is forced to consider the alternatives of changes in the plumbing to which I have referred and in respect of which costs could fall on the water authorities as well.
The right hon. Gentleman would not expect me to comment on press accounts about the Treasury's routing of the Department of the Environment. However, according to the accounts that I saw, the Treasury are pressing for no home improvement grant allowance and for a 0·35 grams level of lead in petrol. I do not comment on press stories, but what I have said today does not entirely bear out the statements contained in those stories, nor are they entirely in line with the collective decisions of the Government to pursue a sensible environmental policy to tackle lead pollution.
The right hon. Gentleman said that the Opposition would prefer to follow the lead-free route. I mentioned that I have placed in the Vote Office a copy of the documents, which show the detailed response to the Lawther report. There is a graph at the back of that document which, on the evidence available, shows the relative effect as to the time at which any improvement would be noticed. The Opposition's policy would result in a slower improvement in lead pollution. On the evidence available to me, it would be 25 years before we achieved the position that I have recommended should be implemented from 1985.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to allow questions on the statement to run until 4 o'clock. If questions and answers are brief I should be able to accommodate nearly every hon. Member who wishes to intervene.

Mr. J. Enoch Powell: Will the Minister give an assurance that corresponding measures on paint and water will be carried out simultaneously by Northern Ireland Ministers?

Mr. King: I have made the statement on behalf of the United Kingdom.

Mr. Martin Stevens: Does my right hon. Friend accept that there will be general satisfaction at the prospect of a speedy drop of two-thirds in the level of lead in petrol over the next four years? Is it true, as has been suggested in the press, that there has been a deal or understanding with the oil industry, namely, that in exchange for a level of 0·15 grams there will be no declaration of intent to move to lead-free petrol?
Does my right hon. Friend agree that over the last 10 years, by a comprehensive programme that has attacked not only lead in petrol but other toxic gases emitted from motor cars, the United States has developed technologies that have enabled a barrel of crude oil to send a car for more miles? Will he therefore consider a comprehensive review, in the United Kingdom, of all the toxic elements generated by automobiles?

Mr. King: I m grateful to my hon. Friend for his opening remarks. I saw the Sunday newspaper account about a deal and I am glad to have the opportunity to make it quite clear that it is totally untrue and that there is no such deal. My hon. Friend raised an important point when he referred to other emissions. In that connection, we are considering the monitoring arrangements for all other emissions as well.

Mr. George Cunningham: What figure presently applies in Germany which corresponds to the 0·15 figure that the right hon. Gentleman has announced for Britain? What is the relationship between the study referred to at the beginning of his statement and the investigations, now being carried out in Islington and elsewhere, that have been sponsored by the EEC?

Mr. King: The level in Germany is 0·15. At present, the level in other EEC countries varies between 0·4 arid 0·15. I shall be tabling a paper on the other study tomorrow.

Mr. R. A. McCrindle: Would it not have been preferable to move rather more swiftly to the introduction of totally lead-free petrol and then turn all the pressure open to Government and private industry to persuade motorists to move to its use, as that has been a successful approach in many other countries?

Mr. King: If my hon. Friend studies the chart contained in the document that I have placed in the Vote Office he will see that the earliest and most significant reduction in lead emission will be achieved by the move to a level of 0·15. On all the evidence available to the Government, first, the move to lead-free petrol would take longer to introduce and, secondly, the cumulative effect would take place much more slowly.

Mr. Kenneth Marks: Does the Minister agree that a certain group of people and localities


are most severely affected, namely, young children who get the exhaust smoke straight in their faces and are nearer the dust, and those localities that have the highest concentration of vehicles, lead water pipes and factories that use lead? Will he go further and pay grant for the changeover from lead water pipes, even if there is no general improvement in the home?

Mr. King: It is our intention that people should be eligible for this grant on its own rather than as part of a general improvement grant. The hon. Gentleman will find clarification of that point in the supporting literature that is available in the Vote Office.

Mr. T. H. H. Skeet: As motorists are particularly concerned about the high octane rating of the car, will my right hon. Friend ensure that lead-tolerant catalysts are developed and additional additives put in? Otherwise, the price of petrol could go up considerably prior to 1985.

Mr. King: With respect, that is a responsibility of the motor industry. I have set out the Government's views on a ceiling for the level of lead in petrol and I have set the date from which that will be effective. I have made it clear in my statement that there will be immediate discussions with the oil industry, and I hope that by agreement it will be possible to achieve that at an earlier date. It will then be necessary for the motor car industry to adjust itself to the new situation that I have announced.

Mr. David Alton: I welcome the report, but is the Minister aware that as long ago as 1971 both BP and Shell said that they could produce petrol without lead? Why have the Government decided to dismiss that alternative? How many young children are likely to be affected during the next five years by the continued use of lead in petrol at its present level?

Mr. King: It is not merely a question of what the oil companies can do; it is also a question of what cars can use. If there were an immediate move to lead-free petrol as from tomorrow, the vast bulk of cars in Britain could not use it. The problem is to achieve the changeover. The advantage of my announcement is that, subject to capital investment by the oil industry for further refining capacity, it will be possible for petrol with the lower level of lead to be used in existing motor cars. It will therefore be possible to make a much quicker shift. That is why we have chosen this route.
If one went down the lead-free route one would have to allow a reasonable period of transition. It would be necessary to design and produce new motor cars, which used lead-free petrol, and to bring them into general use. Although the United States introduced lead-free petrol in 1974, still only half the motor cars there are able to use lead-free petrol.

Mr. Robin Maxwell-Hyslop: Has my right hon. Friend looked into the possibility of accommodating lead-free petrol in existing engines by using petrol alcohol blends? Could we not exchange North Sea oil, which Brazil needs, for the alcohol fuel that is produced in Brazil, which we need? In that way, we could produce blended alcohol and oil-based fuels that could be used in existing engines without a tetra-ethyl lead element in it.

Mr. King: I hesitate to engage my hon. Friend in discussion on such technical matters. I think, Mr. Speaker, that you will agree that my hon. Friend has a rare ability to introduce a new angle to any subject under discussion in the House. I should like to consider the point that he has raised.

Mr. Neil Carmichael: I congratulate the Minister on his statement, and particularly on his comments on domestic lead supplies, but is he aware that in the central belt of Scotland the water is very soft and that particular dangers therefore arise? Is he further aware that as many of the houses are old and carcassed in lead piping, special arrangements will have to be made to help the local authorities to provide the money for conversions? Has the right hon. Gentleman had talks with Scottish Ministers on that subject?

Mr. King: I assure the hon. Gentleman that my right hon. Friend the Secretary of State for Scotland and his colleagues have been very much involved in the discussions. All those concerned recognise that there is a widespread problem in Scotland. The size of the problem is about the same as that found in England, but in terms of Scotland's population the problem is much greater.

Mr. John Bruce-Gardyne: As one who has cycled daily in central London for the past 20 years, may I ask my right hon. Friend to remind the House of what the Lawther committee said about lead emissions from petrol? Did it not say that it was unable to detect any significant health hazard as a result of such lead emissions? What is my right hon. Friend's best estimate of the total cost of his statement to public funds, and of the aggregate cost to consumers?

Mr. King: Although I understand that an impression may have been gained in some quarters that Professor Lawther felt that there was no need for action in that respect, that is not correct. He drew attention to the need to match the lead-in-air standard, and made it clear that the lead content of petrol was one of the factors that gave rise to excessive lead-in-air concentrations in Britain. That point should be made clear. My hon. Friend will be aware that further work has been done and several studies have emerged since the Lawther report, which reinforce the concern felt.
The total annual cost is estimated to be about £200 million. The cost to the consumer is likely to be incurred in 1985, or thereafter. For the motorist, it will amount to about £25 a year. I hesitate to give figures for additional costs on petrol prices so far ahead as 1985. At present, our best estimate is about 4p per gallon.

Mr. Clinton Davis: How long did Germany take to put the change into operation? Furthermore, how long did the change take in the United States of America? Is the right hon. Gentleman aware that Rushmore infants school, in my constituency, was found by the Inner London Education Authority to have 10 times the level of lead in dust recommended by the environmental authorities of the EEC and the United States of America? What comfort can be given to the parents of those children?

Mr. King: On the hon. Gentleman's first point, I should need to check the exact length of time involved. The test is how quickly the oil industry can adapt its refining capacity to produce adequate supplies of fuel with


the equivalent octane level but with a lower lead content. That will involve additional refining capacity. That is the yardstick that we used for setting the length of time. As I have sought to make clear in my statement and in the answers that I have given, I hope that we shall be able, in discussion, to improve on that date.
It is precisely as a result of our concern about the difficulties faced in the hon. Gentleman's constituency and several other inner city constituencies that we have acted in order to achieve the earliest possible reduction in lead levels. I hope that the hon. Gentleman will co-operate and will help to put across information about the other areas of hazard. There is a tendency to concentrate exclusively on lead in petrol. Professor Lawther drew particular attention to other significant problems, not least that of canned food.

Mr. Nigel Forman: Although I warmly welcome the decision taken by my right hon. Friend and by the Government, will my right hon. Friend tell the House why it is so much more difficult to move from 0·15 to zero? That is not entirely clear to me.

Mr. King: It is a question of time lag, and of bringing into use cars that can use lead-free petrol. If one allows for the time lag that we believe will inevitably be involved, one must face the fact that time will be lost in reducing the amount of lead in the air and, therefore, in reducing lead pollution of the atmosphere. I hope that the graph in the Vote Office will make that point clear to my hon. Friend.

Mr. Donald Anderson: As the Minister now apparently accepts the scientific evidence of the effect of such pollution on young children, will he not go beyond the figure of 0·15 and give a timetable for lead-free petrol? Is he aware of the report of the Environmental Health Officers Association, to the effect that many local authorities in England and Wales no longer give discretionary grants because of the Government's cuts in housing? Will he bear in mind that the new housing improvement grant that he mentioned may have no effect, because of overall Government cuts?

Mr. King: The hon. Gentleman's latter point is a matter for individual local authorities. Some local authorities will mot need to make such grants available. I should not want the statement to be misunderstood. This is a serious statement, but it is not a cause for general alarm throughout the country. Hon. Members should be aware that there are areas and pockets of concern. In England, the water problem is confined to a limited part of the country. In Scotland, the problem is more prevalent. There is not a national traffic problem. As for the medical evidence, the pilot studies give cause for concern. The hon. Gentleman said that I apparently accepted the medical evidence. I mentioned the need for a wider study, and the Government have made a request to the Medical Research Council.

Mr. W. Benyon: Why have my right hon. and hon. Friends rejected the use of exhaust filters, which have the triple advantage of practically eliminating lead emissions, avoiding the reconstruction of refineries, and providing many extra jobs?

Mr. King: I understand that such filters would not work with the low-level lead content that we have

proposed. Our proposals are for the quickest way to reduce lead pollution in the atmosphere. The lead content in petrol is the most serious car pollutant.

Mr. Leslie Spriggs: Given the crucial importance of lead-free petrol to the health of the nation, will the Minister come clean and tell us how long his Department has had the Lawther report?

Mr. King: The Government received the report in March 1980.

Mr. Robin Squire: I warmly congratulate my right hon. Friend on his statement, but will he bear in mind that there is a balance between other emissions and lead? As some of my hon. Friends have said, if we put the control of other emissions to one side by controlling lead we may make future problems more serious.

Mr. King: I entirely understand why my hon Friend raised that point. I have already told the House why we have taken this decision on the seriousness of the problem and why we believe that we should take the earliest possible action on lead pollution.

Mr. Alfred Dubs: Will the right hon. Gentleman comment on the increasing evidence that any lead in petrol is dangerous to the health of children, in that it causes mental retardation and behavioural difficulties?
Further, will the Minister comment on the scientific suggestion that by lowering the level of lead in petrol smaller particles will be emitted from motor cars and that these will be more easily absorbed into the human body?
Finally, in his statement has the right hon. Gentleman been influenced by the EEC directive of 1978, which suggested a lower allowable limit of 0·15 per cent.?

Mr. King: It is precisely because we accept the hazards of lead pollution that we have sought to achieve a solution that gives the earliest possible reduction in lead levels.
I am not aware of the second matter raised by the hon. Gentleman, and I should like to look into it.
On the third point, although the EEC directive fixes the minimum level in the Community, there is nothing to prevent the use of a lower level in this country.

Mr. Denis Howell: Will the Minister now explain his 25-year reference? I have had an opportunity to look at the graph. Is it not clear that it is a little misleading? Is it not possible to have a reduction programme simultaneously with the announcement of a lead-free policy to follow it? Why have other countries been able to announce lead-free programmes without any reference to 25 years? Indeed, lead-free petrol is now available in many countries.
Secondly, the Minister said that the annual cost would be £200 million a year—£25 a year for the motorist and 4p a gallon on petrol. What would be the additional cost if we took the decision to have lead-free petrol?
The question of water authorities and local authorities is an important one, as the Minister said. Will he assure the House that the funds for an extensive programme of re-equipping water supply, where necessary, will be made available?
In view of the importance of this subject and the ground to be investigated and covered, we would hope to have an early debate on the whole matter.

Mr. King: The right hon. Gentleman will appreciate that the last point is a matter not for me but for my right hon. Friend the Leader of House. However, I should welcome that opportunity if it were possible.
I cannot explain across the Floor of the House how the right hon. Gentleman should read the graph. This is a cumulative matter. The right hon. Gentleman will find that the cumulative reduction—this point has been made by all people writing on the subject—will not be achieved by an equivalent amount in the lead-free system until the date that I have given.
The right hon. Gentleman asked how the costs of lead-free petrol would compare. As against the £200 million for the 0·15 per cent., the total cost would be £350 million and the average cost to the motorist would be £50, not £25.

Orders of the Day — Finance Bill

(Clauses 1, 4, 19, 23, 27, 29, 88, 89 and 122; and schedules 1, 2 and 11.)

Considered in Committee [Progress 6 May]

[MR. BERNARD WEATHERILL in the Chair.]

The Chairman of Ways and Means (Mr. Bernard Weatherill): Before I call the first amendment for discussion, I should like to apologise to the Committee. Hon. Members may have noticed that amendment No. 59, to clause 27 and amendment No. 58 to clause 29 have not been included in the marshalled list of amendments for today. Those amendments have now been reprinted on a separate sheet, which is available in the Vote Office, and they have been included in my provisional selection of amendments.
I apologise to the Committee, and to the official Opposition who tabled these amendments, for the oversight in the printing process.

Clause 27

SOCIAL SECURITY BENEFITS

Mr. Robert Sheldon: I beg to move amendment No. 19, in page 15, line 12, leave out subsection (1).
Clause 27 taxes unemployment and supplementary benefits paid to the unemployed. For many years it has not been possible to tax these benefits because of difficulties in collection. The clause seeks to tax these benefits up to the standard rate of benefit. It does not seek to tax supplementary benefits for children, housing or certain exceptional circumstances. All the details concerned with this matter are to come into force by regulations.
Later we shall question why the regulations are to take the place of what we consider ought to be the proper way to do it—by a schedule to the Bill. As I said, that is for later discussion. Meanwhile, we note that the proposal is to bring in the regulations under section 204 of the Taxes Act.
The procedure is that the unemployed person will not have tax rebates paid to him until he is back in employment. He will get no refund of tax until he starts work or until the end of the tax year, whichever comes first.
In the 1980 Budget Statement, the Chancellor announced that short-term social security benefits would be taxed to remove a disincentive to work. I am not sure how the Chancellor measures these incentive and disincentive effects. I believe that he has come adrift on some of these incentives. The relief for higher rates of income tax was supposed at one time to be the salvation of our industry. Lower taxation was put forward as a panacea at the election. However, we can see very little evidence of any results from such incentives. I am not sure that the Chancellor will see very much by way of incentives from the proposal in clause 27.
I have always believed in the principle of taxation of short-term benefits as of nearly all other forms of income.


They form part of income. The original intention of those who introduced short-term benefits in the late 1940s was that they should be included. They were taken out of tax only because of the administrative problem and the numbers of civil servants required to produce what could be accepted as a fair and reasonable system.
One of the questions that I shall be asking the Financial Secretary to the Treasury concerns the number of civil servants that he will require to make the system workable. The problem has increased as more people have come into tax. In 1949–50 a married man with two children on average income came into taxation when his income was 99 per cent. of average income. As a result of the Bill, the proportion will now be 38 per cent. It is clear that this will have enormous consequences for the taxation of short-term benefits because more people will come into tax. It will become more attrative to the Inland Revenue to tax people on unemployment benefit because the revenue is greater, but it will have a greater difficulty because there are more of them.
It is difficult in these matters to divorce the principle of taxing these people from the administrative problems concerned. Have the Government discovered a practicable and equitable solution of taxing those on unemployment benefit who are not presently being taxed on it?
We shall be debating the details of clause 28 in Committee upstairs, but that clause shows how this system will be implemented. Clause 28 should frighten the living daylights out of anyone who has any lingering doubts that the citizen is mightier than the State. But that is for discussion in due course.
Clause 29 will deal with the regulations. As I have said, these should form a schedule to the Bill. Treasury Ministers have funked placing before the Committee the full details of what they intend to do, and they are leaving them to be introduced under regulations. We shall be opposing them on this matter. If we are unsuccessful, I must serve notice on the Government Front Bench that we shall seek to change this in subsequent years, if necessary, by amendments and by new clauses at various times. We take a very poor view of the way in which this escape route has been found to avoid dealing with delicate and not very good legislation.
The big argument for not taxing unemployment benefit in particular has been the saving of civil servant numbers. Every Treasury Minister has always examined, whenever he has gone into Great George Street, schemes for taxing these short-term benefits, unemployment benefit in particular. A fair scheme, unquestionably, is expensive to operate.
We note that the Government are keen on reducing the number of civil servants. They have been saving civil servants in a number of ways. They have been saving them on statistics, because they do not want to intervene—and even more, they do not even want to know. They have been saving them on those investigating income tax frauds from the special offices. They have been saving civil servants where they could be shown to produce large sums in revenue. But, at the same time, they have been employing more civil servants to examine social security frauds. They have been chasing up the pence and ignoring the tens of thousands of pounds that are available for collection. Employing more civil servants for taxing short-term benefits seems to be part of this variable change of opinion as to the levels needed in the Civil Service.
The questions that we must now ask ourselves when we are looking at the numbers of civil servants—we shall want some answers during this debate; I have informed the right hon. and learned Gentleman's private office about this matter—are as follows. What numbers of civil servants will be required to undertake this scheme? Where will they be placed? What will be their responsibility? How many claims for benefit do they reckon to deal with? How many movements of paper will be required?
What we really want is a proper discussion of what the Government intend to do in the regulations that they propose to introduce in due course.
As I have said, the number of civil servants required to operate a truly fair scheme is very large, because there are four parts of the administrative framework, and each depends on another. We have the benefit office, the tax office, the claimant, and the employer. All of these people are in some sort of contact with each other. So there is a vast amount of intercommunication which is very expensive in Civil Service manpower.
What can be done—it seems that the Government are thinking in these ways—is to short-circuit this by administrative fiat. What the Government are saying is that the civil servant will make a statement as to the amount owing, and if there is no objection within 30 days, that will be it. It is not subject to any appeal or to the normal rules of law, or to Members of Parliament being able to take a case on behalf of a constituent and being able to say that there were overriding reasons why a person was not able to do this. All of these matters will be turned aside because the Government need a simple system to make the whole thing work. It is on this matter that we shall want to hear from the Minister.
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We know from the greatest authority in this respect, the chairman of the Board of Inland Revenue, the distinguished public servant, Sir Lawrence Airey, that 10 per cent. of the Inland Revenue's codings are wrong. This information was given to the Public Accounts Committee in questioning last week. This established service, with a great reputation and great integrity, is subject to that kind of error. What are we to make of a new service, questioning people frequently at the lower level of income, people who are not well versed in dealing with many matters concerning benefits received, and who do not keep proper records and accounts? Yet they have only 30 days in which to lodge their objections, and if they do not do so, this House, every MP, is powerless to act on behalf of a constituent.
That is the kind of simplification, the kind of demotion of fairness and equity, that we are asked to contemplate. That is why we thought it important enough to bring to the attention of the whole House in Committee.
The trouble is that the present Government are trying to get the taxation of short-term benefits on the cheap and nasty. They are indifferent to the grievances and injustices, and it is the task of the House of Commons and this Committee to make them aware of them. We must give the Government a responsible warning that we are not prepared to see civil servants put into the invidious position of harrowing those who receive benefits just because the scheme that the Government are providing can succeed only on such a basis.
But our opposition is based not just on the administrative simplifications and the unfairness which the


scheme introduces. On 26 March 1980, the Chancellor of the Exchequer dealt with the taxation of these benefits. He started off in this way:
First, we have the scheme, which my right hon. Friend the Secretary of State for Social Services announced before Christmas, whereby employers would have the responsibility for the payment of a minimum level of sick pay during the early weeks of sickness. This will bring the bulk of sickness payments into tax through PAYE. This scheme should be operating from April 1982.
We know what happened to that. Then the Chancellor went on—and this is the scheme that still survives, so far—
Secondly, we intend to bring benefits paid to the unemployed into tax at the same time. This will be done in such a way that in general the claimant will neither receive refunds nor suffer deductions of tax until he is back at work.
That is the stick. The Chancellor continued:
We are also considering how best to bring into income tax at an early date the remaining short-term benefits, and invalidity benefit, which, primarily for administrative reasons, are at present untaxed."—[Official Report, 26 March 1980; Vol. 980, c. 1460.]
The Chancellor went on to say that he did not want to wait until 1982 to tax short-term benefits, and, as a result, he would be increasing unemployment benefit and other benefits by 5 per cent. less than what would fully reflect the forecast price movements.
This 5 per cent. on the unemployment benefit and other benefits continues each year. I understand that it was to be a temporary measure, until people were brought into tax, which was the purport of what the Chancellor was saying. But the Government are now bringing these people into tax, and the obvious corollary is that that 5 per cent. should be paid back. The 5 per cent. continues each year. Each year the claimant will be getting a 5 per cent. cut, which will continue year by year. It was lost in November 1980, and it will be carried through to the 1981 uprating and all the others to come, unless the Government take some action. The total benefits each year will be that 5 per cent. less than they should have been.
If we compare unemployment benefit with invalidity benefit, we see that the Chancellor said on 10 March:
when invalidity benefit comes into tax the 5 per cent. deduction made from the November 1980 uprating will be restored."—[Official Report, 10 March 1981; Vol. 1000, c. 770.]
So the principle has been conceded. The financial Secretary nods. If it has been conceded for the invalidity benefit, it should also be conceded for the unemployment benefit. As we know, the value of the invalidity allowances is to be restored from November next.
We have seen some rough justice, with benefits increased less than the cost of living to take account of untaxed benefits. That is rough justice because some of those beneficiaries would have paid no or very little tax. We have seen biased and partial justice which those claimants do not deserve. But that was for last year. What matters now is that next year we shall again be taxing those benefits. That is truly double taxation. Beneficiaries have had their unemployment benefits reduced and they will now be taxed on what they did not receive. That is the double taxation that the Government are introducing. The unemployed lose part of their benefit and are then taxed on the reduced portion. I can imagine the outraged letters to the Conservative press if the Chancellor had tried that sharp practice on the higher paid.
What worries me is the use of the tax system as a punitive measure which calls into question the uncertain aspects of some of our tax system. We now have two kinds of income tax—schedule D, with allowances for expenses, where one pays months later in money reduced because of inflation. Schedule D allows one to engage in tax avoidance with complicated accounts subject to negotiation. On the other hand, with PAYE one pays on the nail and has no alternative. Not only will these people pay on the nail but they will be robbed too. That is unjustified. We shall oppose it strongly and continually.
When the Government announced that they would introduce taxation of short-term benefits, including unemployment benefit, we were not hostile but we were questioning. Now we have seen the Bill. We have not yet seen all the details, but even at this stage we can see a number of the injustices that it entails. If the Government wish to introduce proposals to tax those benefits equitably, we are prepared to consider them afresh. Meanwhile, we intend to oppose the measures, no only on the Floor of the House but in greater detail in Committee upstairs.

Mr. David Winnick: Like my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), I have strong objections to the clause. Once again the Government intend to penalise the unemployed. The Government have previously introduced other measures which have hit the unemployed—for example, the phasing out of the earnings-related supplement. That supplement helped a large number but will be ended in 1982. Another measure which has hit them is the ruling whereby anyone who has been unemployed for longer than 12 months and tries to claim unemployment benefit will not receive a penny if he has over £2,000. A number of unemployed who have received redundancy money will find that they will be unable to receive supplementary benefit once the unemployment benefit is exhausted after 12 months.
The Government have refused to grant long-term supplementary benefit to the registered unemployed, no matter how long a person has been registered, how hard he has tried to find a job or whatever his family circumstances. As my right hon. Friend said, unemployment benefit, like a number of other short-term benefits, will increase by less than 5 per cent. the rate of inflation.
In an interesting letter to The Times today, the director of the Child Poverty Action Group points out that between June 1979 and June 1980 flat rate unemployment benefit for a couple with two children fell from 45·5 per cent. of average net income in work to 42 per cent.
The reduction in the 5 per cent. increase has meant the loss of about £1·65 for a couple. That sum can mean much to someone who has lost his job, especially if he has family responsibilities. It may not mean a great deal to right hon. and hon. Conservative Members—

Mr. D. N. Campbell-Savours: Who are not listening.

Mr. Winnick: —who are not even listening. The sum of £1·65—which to the Financial Secretary to the Treasury is just a tip that he would give without a second thought—to many of my constituents is considerable when their wives have to check every penny because they are unemployed and do not know how long it will be before


they get a job. However, we would not expect the Government to understand the difficulties and hardships that the unemployed have to endure.

Mr. Campbell-Savours: Has my hon. Friend seen the article in The Times recently which mentioned the considerable division between Treasury Ministers and civil servants in the Treasury on the Government's attitude to monetarist policies? When we consider that the Ministers present today are not listening to the speeches of hon. Gentlemen in this vital debate, we can clearly understand the difficulties that Treasury officials have. It appears that Treasury Ministers are unwilling to listen to the better judgments of their officials, especially in criticising the monetary strategy of the Government.

Mr. Winnick: I endorse that. It is unfortunate that the Financial Secretary to the Treasury did not listen to my hon. Friend. Perhaps he will read it in Hansard. It was a useful intervention and worth studying by the right hon. Gentleman and his colleagues.
The Government not only pursue policies that have brought the highest unemployment since 1933; they also seem determined to harm those who become victims of their policy. A person, especially a family man, who becomes redundant needs all the financial support he can muster. Although the Government may argue that under the clause an unemployed person will not pay income tax on his short-term benefit until he is back in employment, he will not be able to receive the proposed tax refund until he returns to work or until the end of the tax year. That is a setback to the unemployed.
At present, someone who becomes redundant—there are enough in that category now—can, if he claims, receive his tax refund quickly. That helps to support him while he is out of work. Anything that helps the unemployed to survive the ordeal of the dole queue is worth supporting.
Some of my constituents, if they are quick enough, can claim a tax refund. If they are due for a tax refund, they will receive the money. However, under the clause that will not happen. That is why the clause penalises the victims of the Government's economic policies. I wonder whether Treasury Ministers and other members of the Cabinet would be so complacent if they had to endure the shock, pain and humiliation of being made redundant, not knowing how long it will be before they get another job, and did not have private wealth or substantial savings. Would they be so willing to pursue their present policies?
One must compare the manner in which the unemployed will be penalised, and have been penalised over the past 18 to 20 months, with the way in which tax evasion continues. We know of the activities of the Rossminister Group. My right hon. Friend made a valid point when he said that people who have received unemployment benefit, less the 5 per cent., will pay tax, but that the 5 per cent. will not be restored. That is a form of double taxation. My right hon. Friend said that those in the higher income tax bracket would squeal. Of course they would—but they would not expect such treatment from the present Government.
As is to be expected, there seems to be a different attitude towards those with high incomes, who are well protected in many ways. Income tax reductions help not the average income earner, let alone those with less than average incomes, but those with high earnings. The most

unfortunate sections of the community are now being penalised, by the Government's taxing unemployment benefit, supplementary benefit and the rest. There may be a case for taxing short-term benefits, but the way in which the Government are going about it should make us all the more determined to oppose their proposals, which are unjust.
The unemployed person needs all the support that he can be given. The phasing out of the earnings-related benefit was a blow. I referred to it when we discussed the Budget last year. Now the Government are telling unemployed people that they cannot claim the normal tax refund that one could usually claim quickly to help in surviving the ordeal of unemployment. That is wrong, and that is why we have every justification for opposing this part of the clause.

Mr. David Ennals: Like my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), when I was in Government, as Secretary of State for Social Services, I made it clear that I accepted the principle of taxing short-term benefits. But the extraordinarily unfeeling way in which the Government have treated the unemployed, and the timing of their decision, are almost beyond comprehension.
When I was preparing my notes I intended to say that the Government had clobbered the unemployed twice over, but my conclusion now is that they have clobbered them five times over. First, as my hon. Friend the Member for Walsall, North (Mr. Winnick) has said, they show insensitivity to the effects on a man's mind, behaviour and consciousness of being forced into unemployment. Some Ministers on the Treasury Bench may not have spoken to people who have now spent long months unemployed as a result of the policies that the Government have forced on the country. They may not know of the humiliation felt by the unemployed, the increase in psychiatric disturbance, and the need for people to see their general practitioners simply because of the psychological effect of being unemployed, being forced out of work, which they believe to be their right.
Secondly, there was the decision of the Secretary of State for Social Services to clobber the unemployed a second time by reducing the level of unemployment benefits. Many of us on the Opposition Benches spoke bitterly, because we felt bitter and still feel bitter, about his decision at the time of the previous Budget that those who should suffer most were not the people who earned most but those who earned least, or who earned nothing and received only benefit. That was an act of despicable meanness by the Government.
The unemployed, already miserable because of their unemployment, with little opportunity of finding new jobs, with a level of benefit below that to which they believe themselves to be entitled, and to which they were entitled under the previous Government, are clobbered thirdly by the Government's now bringing their short-term benefit—long-term though it may be in fact—into taxation. We have heard nothing from the Government Front Bench so far today, but Conservative Back Benchers have often spoken nonsense about people being better off out of work. They will certainly prove now that that is not true. It never was, except of a very small number of people with large families.
There has been a massive increase in the number of people brought within the tax net as a result of the Government's decision to end the working of the Rooker-Wise-Lawson amendment. That was the Government's fourth method of clobbering the unemployed. The allowances to which they were entitled no longer exist.
The Government's fifth method of clobbering the least fortunate in our society is their decision on tax refunds, which is meanness five times compounded. It is despicable to force the unemployed to receive their tax benefit either when they return to work—they are lucky then; when they are out of work they are unlucky, so they are denied what was everyone's entitlement until the introduction of the bill—or at the end of the tax year, which may be 11 months after their entitlement.
We have 2½ million unemployed, and the figure is rising steadily month by month. It will probably go as high as 3 million. What can be the Government's motive in deciding to take measure after measure to damage the unemployed, already damaged as a result of the Government's decisions and their monetarist policies? Of all the clauses in the Bill, this is perhaps the most despicable, the meanest and the most worthy of condemnation.
I am glad that the amendment has been moved. I shall vote proudly with the rest of the Opposition, and I hope that we shall be joined by some Conservative Members. There do not seem to be many present who give a damn about the issue—

Mr. Winnick: Nor does the Minister.

Mr. Ennals: Having had responsibility in a previous Cabinet for, admittedly, a much smaller number of unemployed, I feel deeply and passionately about the way in which the present Government are behaving towards a most unfortunate group in our society.

Mr. Keith Best: I think that there is general acceptance in the House—there certainly is in the Committee—that short-term benefits should be subject to tax. Not one speaker on either side of the Committee has said that that should not be so.
I welcome the Government's decision to bring short-term benefits within the tax net. The abuse may have been over-estimated by many, but the general public perceived that some people were doing very well out of the fact that benefit was not subject to tax. However, a number of us on the Conservative Benches are concerned that the Government have not given an undertaking that the true level of unemployment benefit will be restored when the benefit is finally brought within the tax bracket.
The belief that short-term benefits should be brought within tax is also held by the Child Poverty Action Group. I am sure that most hon. Members taking part in the debate have received its copious briefs. It does a great service to the community through its research, which helps us to come to decisions.
I shall not repeat the points that have already been made about the pronouncements of various Ministers about the nature of the 5 per cent. shortfall. I ask right hon. and hon. Members to consider only two. The first is the statement by my right hon. Friend the Secretary of State for Social Services during the Committee stage of the Social Security (No. 2) Bill last year. He said:

as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. One will give way to the other."—[Official Report, Standing Committee B, 30 April 1980; c. 526.]
The other was made by my hon. Friend the Under-Secretary of State for Health and Social Security. She said:
It is a temporary measure pending taxation."—[Official Report; 3 February 1981; Vol. 998, c. 140.]
What confuses me to a certain extent is why it is said that security is being given to the invalidity benefit and that that will be safeguarded but that unemployment benefit will not be safeguarded. To my suspicious lawyer's mind, there seems to be an inequality of treatment there which needs further amplification.
It may be said by the Government that the current level of unemployment benefit is too high and that it has to be reviewed. If that is really the Governement's view, it is only fair to this Committee that it should be spelt out. We could then argue about that rather than seeking to gain an assurance that unemployment benefit will be restored to its former level minus the 5 per cent. shortfall, if that assurance is not to be forthcoming in any event because in reality the Government are saying that unemployment benefit is too high.
You would not allow me, Mr. Weatherill, to go into a broader debate on that subject, and in any event there is not time for it today, but it was clearly the impression of many of my hon. Friends and quite obviously it was the impression of Opposition hon. Members that when pronouncements were made about the 5 per cent. shortfall it was on the clear understanding that the shortfall would be made good when the short-term benefits finally came into tax.
All I ask my hon. Friend the Financial Secretary to do is to tell the Committee what the Government really mean. I do not argue that the Government do not have to look at the matter in the light of prevailing economic circumstances—it would be supreme folly not to do so—but it is only fair that the Committee be told whether the Government will never give an assurance that those benefits will be made good or whether they are saying that they think that short-term benefits should be reviewed per se. If the latter is the Government's response, I hope that my hon. Friend will feel able to say so.
There is no shame in saying that any benefits should be subject to review. I have no doubt that such a statement would be greeted with a cacophony of noise and abuse from the Opposition, but I am sure that the more rational and realistic of hon. Members would say that it was right to look at matters from time to time and to review benefits.
I ask my hon. Friend to say on behalf of the Government whether that is the case. Then we can have a debate about it.

Mr. John Horam: I support the decision to count unemployment benefit and other short-term benefits as taxable income, and I do so for two reasons.
Those whose income comes from State benefits such as unemployment and other short-term benefits should be treated the same as those whose income comes from work. That is a simple matter of equity. In a notably inequitable tax system, we should sieze every opportunity to make a further step towards fairness.
Here, we are discussing in practical terms the difference between people who work all the year and the amount of tax that they pay and people who work only part


of the year and may be unemployed for the remainder of the year, and the amount of tax that they pay. That, in the real world, is the position that is affected by the clause.
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I am also in favour of bringing unemployment and other short-term benefits into the tax net because it widens the tax base. Over the years the tax base has narrowed substantially. That is one of the reasons why we have had to increase the rate of income tax and why we have had to lower the tax threshold to the remarkable and damaging point to which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred just now. People are paying tax on an extremely low level of income—below the poverty level—and that is indefensible whichever way it is looked at. Therefore, it is important to begin trying to widen the tax base so that we may reverse this general creep of the tax threshold down to ever lower levels of income.
As a number of hon. Members have pointed out, the principle of taxing short-term benefits is one that not only this Government are seeking to bring into effect but that was supported in principle by the Labour Government. The right hon. Member for Norwich, North (Mr. Ennals) agreed that he, as Secretary of State for Social Services, had supported the principle of taxing short-term benefits.
That being said, however, it is legitimate to put two questions to the Government. First, there is the question that the hon. Member for Anglesey (Mr. Best) talked about so effectively. I refer to the 5 per cent. deduction made last year. It was made in lieu of taxation. We are now getting taxation, and it is legitimate to ask what are the Government's intentions about restoring the deduction that was made last year. I will not go into that at any length, because the point has been made from both sides of the Committee, but it is a question that the Government must answer.
The second and wider question is a taxation one, and I put it to the Financial Secretary. It is typical of this Government that while many of us believe that it is right to widen the tax base for the reasons that I have outlined, once again they have started at the wrong end. They have started at the lowest levels of income and they have not gone into the possibility of widening the tax base for those with higher levels of income.
In a leader on 9 April the Financial Times pointed out the Government's position very fairly. It said:
What is notably lacking is any comprehensive review of what the Inland Revenue rightly calls 'tax expenditures'—the concessions, worth some billions in revenue, to various forms of private income and expenditure. Would-be reformers have argued convincingly that the cost of concessions to house purchase, contractual saving and some classes of capital investment is not simply a matter of lost revenue, but imposes a further heavy burden on the economy, through distorting the allocation of financial and real resources … there is no way in which the Government's aim to create an incentive society can be achieved without facing these issues. Excessive borrowing and income taxes below the poverty line are not appropriate sources of finance.
That goes to the heart of the matter, which the Government must explore.
Is this the beginning of a serious attempt to widen the tax base that will follow through ultimately to other tax expenditures affecting people on higher levels of income, or are we to see once again simply an attempt to penalise the poor and stop there, with no one else being brought into the tax net? That is the fundamental principle of taxation

on which the Government should be answering questions and making their broad view clear to the Committee. In other spheres of economic policy they are anxious enough to point out that they have some sort of medium-term strategy, and I welcome that, but they should also be outlining their long-term view about the evolution of their tax policy, and so far we have heard nothing about it.
There are legitimate questions that the Government have to answer about the way in which they have handled this issue. However, on the principle itself I support the decision to bring short-term benefits into the tax net.

Mr. Campbell-Savours: I see the proposal in clause 27 as very much an inexcusable imposition on great numbers of people who are unemployed today not as a result of their own deficiency but directly as a result of deficiencies in the Government's central economic strategy. I treat this as an imposition, because l cannot separate the clause from clauses in other Bills that we have dealt with over the past 18 months, all of which, collectively, have the effect of penalising our constituents.
We have seen considerable increases in nationalised industry prices, which in many ways are only substitutes for taxation. In many areas they were introduced simply to raise revenue where the Government had given hack tax in their first Budget. The allowance thresholds have been frozen in this Budget. That, too, is a severe penalty to my constituents and the constituents of my hon. Friends, particularly as we are now told that the taxation threshold has been reduced from nearly 90 per cent. to 38 per cent. That brings many more people into the tax net.
The decision to phase out the earnings-related supplements is causing considerable anxiety to industrial workers throughout the country. There have been increases in VAT, and heavily increased charges for National Health Service provision. Overlapping supplementary benefit rules were introduced in a small measure that passed through the House earlier last year. My hon. Friends will have received much correspondence about the overlapping benefit rule changes, particularly because they affect our constituents in many areas where we had not imagined that they would surface. Many of the problems that arise in my surgery now relate to the changes resulting from that legislation. Those changes were not fully debated, because we could not anticipate them fully.
The measure is inexcusable also because it implies a penalty for unemployed people. The unemployed are beginning to wonder whether the Government are trying to wage a war against them. Ministers rarely appear on television—that being the chief communication medium for most of our constituents—to defend their policies on unemployment. In the grey and indifferent answers that they give in parliamentary replies they do not seem to come to terms with the considerable problems that exist. There is a feeling in the country that the Government are indifferent to the plight of unemployed people. This measure will cut the take-home pay of unemployed people. That is how they see it.
It is inexcusable, too, because the clause is based on a crude deception. That deception of the British people has been mentioned frequently. It stems from the Government's decision, in November 1980, to downrate the increase in unemployment benefit, whereby a single unemployed person will lose 70p and a married couple £1·20. That social security legislation of November 1980, together with the social security legislation currently


before the House, means that married couples will be £1·65 per week worse off. Those people can rightly say that they accepted the decreases because they were decreases on the natural increase in advance of what they thought would be compensatory increases when the Government introduced the taxation of benefits, on which there has been general agreement on both sides of the House.
The hon. Member for Anglesey (Mr. Best) mentioned the comments of the Under-Secretary of State when she chided a Labour Back Bencher, during oral questions some months ago, for criticising the Government's policy on unemployment. I shall quote what she said:
The hon. Gentleman is quite wrong to paint the abatement in unemployment benefit as he did. It is a temporary measure pending taxation which all parties in the House have agreed".—[Official Report, 3 February 1981; Vol. 998, c. 140.]
Labour Members were in no doubt about that. We accepted the Government's word that it was a temporary measure. It is clear that there is disquiet among some Conservative Members, too, about whether the House was misled on that occasion.
I shall quote a small section of the brief that the Child Poverty Action Group sent to hon. Members. That group has been at the forefront of the national lobby and has expressed considerable anxiety about the changes. Its latest brief says:
Dismay and incredulity at the Government's position would have been better descriptions of the CPAG's reaction. We would argue that such a wait-and-see position is simply not good enough. How can Ministers on the one hand argue that the benefit cut was a temporary measure pending taxation and on the other refuse to make any commitment whatsoever to put an end to the temporary measure once taxation takes effect? Their position is untenable. It is surely unfair to ask Members to vote on the question of taxation of unemployment benefit without giving them a clear idea of the Government's intentions with regard to restoring the cut in unemployment benefit. The two issues are interlinked and cannot be debated separately".
That is absolutely right.
The Financial Secretary knows the importance of this issue in the country. He knows its importance to hon. Members who took what was said on that occasion as a promise from the Government that there would be some form of uprating of unemployment benefit before the introduction of taxation on unemployment and supplementary short-term benefits. However, that did not happen. Instead, the Government are picking on a minority—unemployed people—to pay the bills for the Government's failure in their economic strategy.
The right hon. Gentleman bears a heavy responsibility. The article in The Times the other day said that he, as a Treasury Minister, was refusing to accept that Treasury officials, on this occasion, speaking the same language as Members of Parliament, not only on the Labour Benches but on Conservative Benches, were accusing him and his hon. Friends of an inflexibility that was not normal in the House of Commons. The right hon. Gentleman should not be on the defensive when he comes to the Dispatch Box. He should spell out clearly why he has refused to link these important issues. The House was convinced at the time of that statement, and the right hon. Gentleman, in pursuing the approach that he does, is gravely undermining the confidence of the House.
The £200 million that we are told will be raised in revenue as a result of the taxation of short-term benefits and unemployment benefit should go back to the

unemployed and the underprivileged groups of people who are being required to pay it. If Treasury Ministers and Ministers in the Department of Health and Social Security evaluate the worth of that £200 million, they can find responsible ways of channelling it back. The £45 million that will arise directly from the refusal fully to uprate under the 5 per cent. and 1 per cent., under successive social security legislation, should be fed directly back to the groups who are losing out.
There was an article in The Sunday Times yesterday about the difficulties that the hon. Member for Caernarvon (Mr. Wigley) is having with his Bill on disablement. We are told that the Government will not give him his Bill because they cannot afford to do so in the International Year of Disabled People. If the Government have any humanity and compassion—we on the Labour Benches have no monopoly of those qualities—they will have the courage to demand that that part of the £200 million is allocated to these special groups.
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We are told that raising benefits reduces incentives and that reducing and taxing benefits—which is what will happen if the Bill is passed—increases incentives. The greatest and most positive disincentive is the decision not to index-link tax allowances and to raise the threshhold. That is a real disincentive. The failure of the Government to act in that area led them to introduce the change that we are discussing.
The Budget contains a business start-up scheme. It is said in the media and in the corridors of the House that some Government Members object to restrictions in the scheme. Perhaps many people do not know that a great deal of money for people on large incomes is tied up in the clause. Many tens of thousands of people could make up to £7,500 a year by claiming tax relief on investment in small businesses if they are willing to take the risk. I am not against risk takers. Tax incentives should be available. However, we must understand that because of the way in which such schemes are funded, affluent people will receive tax reliefs and unemployed men and women will pay the price.

Mr. K. J. Woolmer: Before I discuss the arguments for and against taxing benefits and the Government's motives, I wish to discuss the reduction in the real value of unemployment benefits. Last year the Government declared that there was to be an interim measure until they introduced other methods of taxing benefits.
About £1·20 a week for a couple is involved in the cuts in unemployment benefit, at a time when we have the highest unemployment level since the 1930s. People will regard that cut as one of to meanest of many mean measures taken by the Government. This year the cuts are expected to rise to £1·65 for a couple. Will the Minister confirm that that is correct? Will he confirm that the measure is still regarded as interim, in lieu of taxation, or have the Government changed their minds? The House is entitled to know. Have the Government decided that the cuts are not interim, but permanent? If they have decided that the cuts are to be permanent, why did they make that decision? Why did they tell the House last year that the measure was interim, in lieu of taxation? We are entitled to clear answers.
I should deplore such a change of heart. I hope that we will have an assurance that the real cuts in unemployment benefit will be reversed. At the least I hope for a clear explanation of Government thinking. They should not let the issue slip away in a general reply. An important principle is at stake. If there is a misunderstanding we should clear it up. Do the Government intend to restore the real value of the benefits?
I can understand the argument that all incomes should be liable to income taxation, given an appropriate method of offsetting allowances. In that spirit many people inside and outside the House accept that all forms of benefit should be subject to income taxation, depending on the level of income received in a year.
That is not the reason given by the Government on a number of occasions. The explanation given last year by the Chancellor of the Exchequer was:
The net extra reward to a low earner from going out to work can be so close to the benefits he can get when on social security as to extinguish his incentive to find or stick to a job. Indeed, there are people whose incomes out of work exceed what they could reasonably expect to get when in work. There is undoubtedly widespread and justified public concern about this disincentive."—[Official Report, 26 March 1980; Vol. 980, col. 1459.]
That is a clear expression of Tory appeal to prejudice, fear and concern. That was the reason given for introducing taxes on benefits. The notion was that in some sense the absence of taxation on benefits provided a disincentive to work. The reason had nothing to do with the view that all income should be taxed.
Does the Financial Secretary still believe that there is widespread concern that there is no incentive to work? If he does, does he believe the concern to be justified? If he believes that it is justified, will he provide figures on which he bases that judgment? What proportion of people are better off out of work than in work? Is the proportion significant? I accept that scroungers exist. Some scroungers are wealthy. They do not do a day's work, but have a high standard of living. They often fiddle or exploit loopholes in the taxation rules. They often have a darned sight better living standard than people on the bottom of the pile. Now that the Financial Secretary is no longer involved in electioneering he should say what effect the Bill will have on the incentive to work. How many more people does he expect to see at work in 12 months' time as a result of this measure?
The conclusions of a Policy Studies Institute study were that only slightly more than 3 per cent. of male unemployed were receiving more in benefits than they would earn by working. The study shows the reality that, on average, unemployed men receive only 46 per cent. of their previous earnings. I accept the frustrations and niggles caused by those who take advantage of social security, but we must recognise that the overwhelming bulk—97 per cent.—of the 2½ million unemployed do not do so. It is unreasonable not to put emphasis on the 97 per cent. who are a darn sight worse off because they are out of work. It is an insult to the problems that they face if emphasis is not placed on them.
Does the Financial Secretary disagree with the conclusions of the Policy Studies Institute? Does he still wish to put the same emphasis on the reasons for introducing this measure? Like so many Government actions—for example, the leaked announcement about an 11 per cent. pay rise for the Armed Forces while they are trying to make civil servants and others accept 6 per

cent.—it is not necessarily the merit of their actions that causes trouble, but the incredible ineptitude of their timing. When unemployment is rising sharply, with more than 2½ million unemployed, and when virtually all the unemployed want to work, the real reason why these measures are being introduced can only be the ideological prejudice of the Government.
More than 22 per cent. of men and youth in Batley in my constituencies are out of work. There are more than 70 unemployed for every job vacancy. Individual after individual comes to me and other hon. Members at our surgeries, or writes to us, to tell us of the real tragedy that they are applying not only for one or 10 jobs, but for 100, 200 or 300 jobs. To paint a picture suggesting that unemployment is a result of fecklessness and scrounging is far from the reality of the painful problems hitting families and individuals. That attitude hits the strikers and the unemployed not simply as irrelevant but as a sickening commentary on the Government's understanding of the problems facing the unemployed. I hope that the Government will respond with a renewed statement of what they think they are achieving and the reason why they are introducing these measures today.
I hope that the Committee will approve the Opposition amendment. It is not the right time to hit still harder at the unemployed. It is not the right time to hit the families of those driven to take industrial action. In this day and age the people of Britain want jobs. The Government should not be concentrating on penalising those out of work but should be ensuring that they create work for my constituents and the constituents of other members of the Committee.
People in Britain want the opportunity to work. They do not want to scrounge or to take advantage of the welfare State. They want the opportunity of a job. Offer them the work and they will take it.

Mr. Austin Mitchell: The clamour of speakers on the Conservative benches casts a depressing light on the attitude of the Conservative Party towards the debates both this week and last week. Last week no one on the Conservative Benches was keen to participate. They disapproved of the Government's decision not to raise allowances in line with inflation, as was argued for by the Financial Secretary in 1977. They are not here this week because of their basic shame about the effects of this clause. The Opposition are trying to counteract the clause by tabling this amendment. Where is the reserve army of the Tory unemployed when this especially nasty piece of legislation is being discussed? How are they salving their consciences?
This is a vicious piece of legislation which reveals the vicious face of the Tory Party. Government strategy during the past two years began with the much-heralded and trumpeted tax cuts for the better-off in 1979. They were primarily for the really well-off, not for the mass of the population. Those tax cuts were given on the pretext of stimulating incentive, initiative and enterprise and regenerating the British economy on the basis of new dynamic forces. At that time, the Chief Secretary warned that they would allow people more time to spend on the golf course, and that has happened. The incentives and the encouragement of enterprise did not work.
We have seen an accelerating downward spiral of decline, the cost of which has been unemployment, a loss


of tax revenue and the need to increase expenditure on nationalised industries. All that has forced the Government now to ask the poor, the unemployed and the social security beneficiaries—the less well-off section of the community—to pay the price of the Government's folly during the past two years and of the failure of their economic policies. One consequence of today's clause has been described as making the Government a Robin Hood in reverse. It is far more vicious than that. It is sheer, simple, fiscal thuggery, which is appropriate to some who sit on the Government Benches. They are taking from those with least to give to finance the failure of the Government's policies during the past two years, and the failure of the tax concessions in 1979.
The unemployed are being asked to stump up their mite to finance that failure. That is the real face of Toryism in the 1980s. They are taking away from those with least to give.
It is not a Tory Party of one nation, but very definitely of two nations in which the downstairs nation pays for the lifestyle and the tax concessions of those upstairs. It is not the Whig tradition of Macmillanite Toryism which looked for an expansion of the cake so that the crumbs of affluence could be dropped on the tables of the workers. We are seeing all the viciousness of a zero sum society in which the poor and the unemployed are asked to pay for the tax concessions for the well-off being handed out by the Tory Party. They have also the consolation that they are paying for the Prime Minister's manifest economic delusions of two years ago—delusions which she and a dwindling band of those in the Treasury still share.
Bearing in mind what has happened over the past two years, the logic is that unemployment benefits should be increased and not taxed in this paltry pettifogging fashion. The whole trend of increased unemployment benefit and redundancy payments in the 1960s and 1970s was to encourage employees to change jobs more rapidly and to encourage labour to be more mobile, to move to new jobs and to sacrifice existing jobs. That was what the improvement and regeneration of the economy demanded. That was the logic behind increasing unemployment benefits and redundancy payments.
The Government have thrown that process into reverse at this time by accepting that unemployment on its present scale is a permanent feature of the economy. In effect, the Government are saying to the unemployed "You have been called on by the Prime Minister to make a sacrifice for the nation. You are asked to be a voluntary import control so that you will not purchase as much from overseas. You are asked to be a sanction or a weapon against trade unions and against those in work so that they will keep down their demands for wage increases and the pressure of wage inflation. You are the reserve army of unemployed to bring pressure on them. What do we give you for this sacrifice? We give you taxation of the paltry benefits that we allow you in the first place. You are asked not only to make sacrifices but to suffer at the same time." That is the logic behind the clause.
That logic is compounded by the insult of last year's 5 per cent. abatement of the necessary increase in unemployment benefit. That was said to be a temporary measure, awaiting the introduction of taxation of unemployment benefit. It was said specifically last year that it was in lieu of taxation. However, there is now no

sign that that temporary abatement will end. Equally, there is no sign that its cumulative effect upon unemployment benefit will be rectified. The effect has been substantial because following the uprating of November 1981 it will amount to a cut in unemployment benefit for a single person of about £1 a week and, for a couple, about £1·65 a week.
The commitment to restoration was specific. The Secretary of State for Social Services addressed the Committee examining the Social Security (No 2) Bill in April 1980. When speaking about the abatement he said:
That will make no difference, because as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. One will give way to the other."—[Official Report, Standing Committe B, 30 April 1980; c. 526]
There is no indication that it will. No promise has been held out.
If the Government meant their words of 1980, they will have the decency now to say that the abatement will be made good, the cut will be removed and its cumulative effect will be removed. How can we accept the clause without a promise from the Government to effect compensation, to ensure that the reduced standard of living of the unemployed will be compensated, if they are to be taxed, by increases in benefits that they should have had last year? If the Government are not prepared to make that promise, it is clear that their intention is to reduce the standard of living of the unemployed.
It has been estimated that about £200 million to £250 million will arise from the taxation of unemployment benefit and the other benefits that will be imposed by the clause. Why are the Government not promising to use that money to extend long-term rates of supplementary benefit to the unemployed? That is a development that would cost about £75 million a year, a small sum when compared with the sum to be raised by the proposal contained in the clause. Why is not the flat rate of unemployment benefit being increased for the long-term unemployed? Why are those in that position not being put in the same position financially as the long-term sick?
It appears that long-term unemployment will be a permanent feature of the economy. It will worsen under the Government's economic policy and the Government have a duty to compensate the unemployed. They are asking the unemployed to make sacrifices. The cost of putting the long-term unemployed in the same financial position as the long-term sick would probably cost less than the saving that the Government will make if these proposals are implemented. Unemployment and supplementary benefits for the unemployed are worth less now when set against the average net income of the diminishing number in work than at any time during the 1970s. It ill behoves a Government who have been arguing for years about scroungers and the "Why work?" syndrome to introduce such a proposal. Indeed, in its 1979 manifesto the Conservative Party stated:
Income tax starts at such a low level that many poor people are being taxed to pay for their own benefits.
That is what the Government are now introducing. The manifesto continues:
All too often they are little or no better off at work than they are on social security.
That is what the Government are now guaranteeing, not so much by the clause that the Committee is discussing but by the rest of the Budget, and specifically by the failure to increase allowances.
Why is this mean, vicious and nasty clause being introduced when there should be a review of the framework of all allowances for all sections of society? Why are the unemployed and social security beneficiaries being singled out for special treatment? There is a second Welfare State of tax allowances. It is extremely expensive and it benefits predominantly those in the middle class. Obviously those who pay more tax receive more benefit from tax allowances. The allowance system is in need of revision and overhaul. It should be subject to broad consideration so that all sections are treated fairly. Why is the review restricted to the unemployed and social security beneficiaries?

Mr. Winnick: Is not the short answer to my hon. Friend's question simple—namely, that we have a Tory Government?

Mr. Mitchell: The tenor of my speech suggests that I hesitate to make such an aspersion against the Government. I am glad that my hon. Friend has made it rather than myself. It is vital that all sections of society should be treated fairly. For example, why are national insurance contributions not to be allowable against tax if benefits are to be taxable?
At this juncture most Governments would try to act with a certain amount of delicacy and tact. Perhaps delicacy and tact are too much to expect from the Financial Secretary but those qualities are not too much to expect from the Government. It is incumbent on a Government who believe that this is one nation and one country to treat all sections alike and not to hit out viciously against one section.
There has been a welcome for the general principle of the taxation of benefits or at least for extending the tax framework. It is one of those bright ideas that are so difficult in practice. It is perhaps good in theory that all revenue should be treated alike for tax purposes, but that is difficult to implement in practice. The difficulties were constantly pointed out by Labour Ministers when the Labour Party was in power.
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The chief difficulty is the large number of civil servants that will have to be employed. A complicated system is necessary if that is to be done fairly or at all. The Government face an ideological problem about increasing the number of civil servants. The Minister has been asked about that several times. I hope that he will tell us what number of civil servants is necessary as a result of the measure.
Because of their ideological quibbles and doubts about increasing the number of civil servants, the Government have tried to cut down that increase to the minimum, by having a stark, simple system. That system, because of its starkness and simplicity, becomes unfair. To stop increasing the number of civil servants, the Government have introduced a system in its most unfair form, through the present proposal. It is a crude system which gives too much discretion to the Civil Service, from which there is no recourse and on which there is no appeal. The Government are getting the worst of all worlds because they are increasing the number of civil servants and treating the unemployed with the maximum brutality.
The provision is based on a myth which was deliberately fostered by the Tory Party for the five years when the Labour Government were in power. That myth

was that the unemployed were scroungers, that they were living off the fat of the land and that they had a higher standard of living than anyone else. That myth was fostered by the Tory Party and Tory press, such as the Daily Mail. Everywhere one went canvassing, people always knew of someone who was living off hundreds of pounds a week and who was spending all his time in the pub, on social security. They could never mention a name or produce an example, but they all knew of someone because they had been told of such people by the Tory Party and the Tory press.
The Government are a little more quiet and tactful about that myth now. However they are still using it to justify the measure. It is being used as the whole basis of their approach. The idea is that the standard of living of the unemployed should be brought into line with that of others and that scrounging should be penalised by such a measure. That is the justification for the measure, even if the Government are now in a new, moderate and condescending, public relations, pitying mood—which the Prime Minister has favoured—and even though they are speaking tactfully about the unemployed these days.

Mr. Woolmer: I do not believe that my hon. Friend noticed that the hon. Member for Sowerby (Mr. Thompson) was vigorously indicating by motions of his head that he felt that a significant proportion of the unemployed were scroungers. I am not sure whether that was the indication. My hon. Friend should give him the opportunity to back that up. Perhaps my hon. Friends should give opportunities to Conservative Members to express their views rather than nodding or shaking their heads.

Mr. Mitchell: I do not believe that the hon. Member for Sowerby (Mr. Thompson) can believe that. Every time I visit my mother in Sowerby and read the Halifax Evening Courier, I see the roll-call of factory, textile and plant closures in that constituency, I see how pressing the problem of unemployment is becoming there. I am sure that the hon. Gentleman cannot have such a view of the unemployed. I hope that my hon. Friend's assumption is incorrect. However, that is a motivating force in large sections of the Conservative Party. I shall exempt the hon. Member for Sowerby from that taint because of the problems in his constituency which should bring the question of unemployment much to his mind. The Conservatives have that view of the unemployed and are using it to justify the measure.
As my hon. Friend the Member for Batley and Morley (Mr. Woolmer) said, the Policy Studies Institute research, which was financed by the Department of Employment and the Manpower Services Commission, found that among only 3 per cent. of whites and 5 per cent of minority groups were there people who received more on benefit when they were unemployed than they had earned while working. The average drop in their income as a result of unemployment was 46 per cent. The pressing problem and picture of the unemployed was one of hardship, not a picture of scrounging, living the life of Riley, drinking 20 pints a day in every pub in the land. That picture has been painted by the Tory Party for many years. The report concluded that benefits could be substantially increased while still maintaining the incentive to find work.
In 1980, the Institute of Fiscal Studies argued that unemployment benefit could be raised by 12 per cent.,


using the extra revenue accruing from taxation of such benefits, as is now being proposed. Why is that benefit not being raised in such a way?
The Government have a clear duty to commit themselves to that policy now so that we can decide on it in the light of full knowledge and information. Tragically, there is now emerging the culture of unemployment which will be not only heartbreaking for the unemployed but destructive of our institutions and of many of the values that are so important to our society. There is a remorseless rise in unemployment. There is now no way in which the Government can stop unemployment rising to 3 million this year. I am almost certain that the rise will continue next year. It is possible, as the Cambridge economic policy group has done, to conjecture a rise to 4 million and more on present trends.
What is to stop unemployment rising? It is not the silver lining which the Prime Minister discerns all over the place because she has not much else to discern in the economic situation. How can unemployment stop rising when the overvalued pound is not competitive, and when we are still not investing or growing? That points remorselessly to a continued decline. Additionally, there is the tremendous burden of unemployment. The calculations of the cost, in lost revenues and in benefits, of each person who is out of work vary, but taking the Treasury calculation it would be an average of £5,000.
We should compare the gross cost of unemployment with the burdens mentioned by Professors Bacon and Eltis. They said that those burdens were shackling the economy under the Labour Government. The burden must now be more substantial and a greater shackle. Therefore, industry must have more difficulties to bear if it is to compete in the world outside. The Government are creating that situation. Unemployment is a burden on industry's back and it will cripple and probably break British insustry.
In the face of those facts there can be nothing of the revival expected by the Prime Minister, the Chief Secretary and the Financial Secretary, who mentioned it in his interview on "Weekend World." There will be no stimulus, no expansion and no growth but a continued further decline and with it, a remorseless rise in unemployment.
It is just when unemployment on such a scale is becoming a long-term feature of the British economy that the Government choose, with their tact, grace and charm, to introduce this vicious, nasty little measure and to start taxing the benefits of the unemployed in such a fashion. It is all very well for the Prime Minister to pity and sympathise with the unemployed when that is politically necessary, after five years of sneering at them as scroungers and layabouts. That is not enough. The unemployed must be helped. They should be helped at this juncture and not treated in such a way.
In conclusion, this is perhaps the Government's most sordid action in a particularly depressing Budget. A Government who have staked much on their desire to cut the Civil Service are increasing it. The measure treats the unemployed crudely and painfully at a time when unemployment is remorselessly rising. It is unworthy of the Committee, although perhaps not of the Government.

Mr. Clive Soley: Earlier, when my hon. Friend the Member for Grimsby (Mr. Mitchell)

pointed to the lack of Conservative Members I overheard one who was leaving the Chamber say that that made it more difficult to keep the debate going. They do not want to keep the debate going for the reasons that my hon. Member gave.
I remember the Conservative campaign before the election to label people out of work as scroungers. I almost take my hat off to the Conservative Party for the way that it makes emotional claims about race, crime and people claiming benefits. The Government, say that they will do the community a service by clamping down on such problems. They rarely, do so, although they try to get away with measures such as this. They made great noises about crime, but have produced only a couple of detention centres, which are supposed, to solve the problem of thuggery. They back down over crime, but I wish that instead they had backed down over this measure. It is one of the most appalling displays of double standards that we have seen.
The campaign waged by Conservative newspapers to support the Government, as my hon. Friend said, picked out individuals who it was said were receiving hundreds of pounds a week that they were not earning. Claimants and others with low incomes were made to feel that there was something wrong with them. Decent people became anxious about what others thought of them. Research is now linking depression and suicide with rising unemployment. The figures also increased during the slump in the 1930s. Work makes a person feel respectable. Depression can be linked to receiving benefits and being accused of being a scrounger. The feeling is perpetuated by the Government and the newspapers that support them. It does a great disservice to the country and causes individuals and families to suffer, as is increasingly being accepted.
When I was canvassing at the last election, people would frequently, suggest that there was work available for so-called scroungers if they wanted it, even though I explained that one had to take account of the skills in demand in an area and income levels compared with State benefits. Newspapers had given what they said were classic examples of scroungers as evil people. Little of that is mentioned now, primarily because people realise that unemployment is a real problem. West London is comparatively well off for employment, but even in my area people recognise that unemployment is a problem.
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The vast majority of working people are not scroungers. For complicated social, economic and psychological reasons a tiny percentage may not want to work and are scroungers, but that is a far lesser problem than that of those on high incomes who make an art of tax avoidance and evasion. The Government show their immorality by not recognising that. A far greater proportion of lost revenue results from actions of people at the higher end of the income scale. I realise that we do not want to set precedents or to justify certain behaviour, but that should not make us blind to what happens at the higher end of the income scale. We pursue so-called scroungers far more determinedly and vociferously than we pursue people at the other end of the income scale.
It is not often mentioned that many unemployed people do not claim benefit, and we do not discuss the lack of take-up of other social security benefits. If an office is raided to collect papers to confirm tax avoidance, it


becomes headline news, and it is said that such action threatens individual freedom and is reminiscent of the actions of the SS and the police striking at night. We do not hear much when people are sent round from the Department of Health and Social Security to find out whether a woman has a man living with her and should therefore be given a few pounds less. Our moral values are the wrong way round.
People on low incomes are more in need of an accountant. Those on high incomes should be able to manage for themselves. There is a limit to the amount of work that people can do themselves, but the moral need is on the side of those with low incomes. That becomes more so as we bring people at the lower end of the scale into the tax net, which people seem to agree is acceptable.
Although less so recently, the Conservatives have used so-called scroungers as scapegoats for the failure of their economic system, although they have given the rich major tax concessions. My hon. Friend the Member for Workington (Mr. Campbell-Savours) mentioned some of those tax concessions. It is a fallacious argument that they will generate investment. People invest for other reasons. Although money is available it is not being invested because of the uncertainty of the future of our economy. It does not pay to invest in Britain, not least because of the Government's policies. The theory behind such tax concessions is wrong.
It is also false to believe that giving people benefits discourages them from working. The two assumptions have led to a division not only between rich and poor and North and South but between those who receive benefits and those who do not. People on benefits have wrongly been made to believe that they are to blame for an economic system that has failed them.

The Financial Secretary to the Treasury (Mr. Nigel Lawson): I hope that you will forgive me, Mr. Lamond, if I am sufficiently eccentric to confine myself to the amendment. In some ways it has been a strange debate. The amendment seeks to prevent unemployment benefit being taxed, yet the overwhelming majority of Opposition speakers, who, led by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), presumably will shortly troop into the lobby to support it, having conceded that the benefits should be taxed. He said that at the Dispatch Box today and he said it many times when he was a Treasury Minister.
I shall now deal with some of the points that have been raised. There was some concern, which I understand, about the uncertainty as to whether the 5 per cent. abatement of unemployment benefit will be made good when the taxation comes into play in April 1982. If I could answer that question here and now, I would gladly do so, but I cannot, for the simple reason that no decision has been taken. This is a public expenditure matter and the decision will be taken in the course of the public expenditure review alongside all the other public expenditure decisions. The review will take place this summer and autumn in the normal way and the decision, of course, will be made clear and announced publicly well before April 1982, when taxation of benefits under the clause comes into effect.

Mr. Campbell-Savours: If that is so, does the Minister believe that the vast expenditure on matters such as Trident

are more important in the Government's evaluation of priorities than expenditure on the unemployed? Will he tell us that now?

Mr. Lawson: No, of course I shall not, and I should be out of order were I to do so. But the hon. Gentleman is right to imply that public expenditure priorities as well as the totality of public expenditure and what can be afforded will be discussed during the review. The results of those discussions will be put before the House and the country well before April. 1982 when unemployment benefit will come into tax under the clause.

Mr. Robin F. Cook: The Minister is resting his case for being unable to assure the House that the 5 per cent. abatement will be restored on public expenditure considerations. It would help us to know how much weight to attach to those considerations if he would tell the Committee how much revenue will be generated by the clause and how much it would cost to restore the 5 per cent. abatement. If more revenue will be gained from the clause than it would cost to restore the 5 per cent. abatement, surely in justice his first priority should be to use that revenue to repay the 5 per cent. that he stole from the unemployed.

Mr. Lawson: It is absurd to talk about money having been stolen from the unemployed. The hon. Gentleman, who is very eloquent, is inclined to get carried away, as he has done on this occasion. I am sure that he will agree that what is legally enacted and approved by the House of Commons cannot be construed as theft. I shall come to cost later. The hon. Gentleman's comparison between the two costs is not relevant. The relevant figure in the public expenditure discussions is the cost of restoring the 5 per cent. abatement, which must be assessed in the light of all the factors in the public expenditure equation. That figure is some £50 million, which is a significant sum.
The hon. Member for Batley and Morley (Mr. Woolmer) asked a question and made an assertion. He always makes thoughtful contributions, which I welcome. In this, he provides an example which might fruitfully be emulated by some of his hon. Friends. He asked whether I could confirm his figures as to the value of the 5 per cent. abatement. I confirm that the figures that he quoted are broadly accurate.
The hon. Gentleman's assertion was perhaps in the form of a question. He was perhaps asking me whether thought that there was still today what has come to he known as a "why work?" problem. Indeed I do. If my hon. Friend the Member for Norfolk, North (Mr. Howell) were in the Chamber, he would certainly be greatly surprised if it were asserted that the problem no longer existed. There is indeed a problem. The hon. Gentleman perhaps inadvertently confused himself by assuming that the full dimension of the problem was the small, although not insignificant, minority who are actually better off out of work than in work.
The dimensions of the problem are far wider than that. There is also the large number of people who, as a result of the interaction of the taxation and benefit systems, are only slightly better off in work than out of work. Finally, there are those—the overwhelming majority of the unemployed—mentioned by the hon. Member for Gateshead, West (Mr. Horam), speaking for the Social Democratic Party, who are in work for part of the year and on unemployment benefit for the other part. The total net


income that they receive as a result is considerably greater than the net income that they would receive if they were in work for the whole year, having the same gross income. That is another dimension.
I commend to the hon. Gentleman, who I know reads a great deal—I refer to the hon. Member for Batley and Morley, in case the hon. Member for Blackburn (Mr. Straw) who has just entered the Chamber is not quite tuned in yet—an interesting article in the autumn 1978 issue of the "Midland Bank Review" by Mr. John Hemming and Professor Tony Atkinson on this whole matter. The hon. Gentleman will know that Professor Atkinson is scarcely likely to be party to anything which sought to grind the faces of the poor, as the Government are alleged to be doing by some Opposition Members; nor indeed is Mr. Flemming. The thrust of that article was that there was a real problem and that the main remedy, although not the only remedy, was the taxation of unemployment benefits.

Mr. Woolmer: If the burden of the Minister's argument is that introducing taxation of unemployment benefits would reduce the balance between income received while unemployed and while working, by how much would the average weekly income be reduced in a typical example? It is not unfair to ask that. How much, for example, if a family man with two children receives two-thirds of average earnings and is in work for half of the year and out of work for the other half, by how much would his average income be reduced? Knowing that would give us some feeling of how much importance the Financial Secretary attaches to the effect of a reduction in income on incentive to work.

Mr. Lawson: I do not have in my head figures for all the different families in different circumstances working for different fractions of the year, but if the hon. Gentleman wishes to write to me, I shall be glad to answer that point.

Mr. Cook: The Minister prayed in aid the study by Mr. Flemming and Professor Atkinson. I trust that before leaving that point he will make it clear that they had set out to show how much better off the unemployed would be if the benefit were taxed and the proceeds used to increase the benefit.

Mr. Lawson: That was not their purpose, although they certainly suggested that the proceeds might be applied in that way. That was not the thrust of the argument. Nor do we have the funds available to do that. Nor, in my judgment, would it be justifiable to use the money for that purpose at any time.
The hon. Member for Gateshead, West was among the many who supported the principle of the clause. He had, however, one further concern. He asked whether the Government were in favour of widening the tax base in general rather than only in this sphere. The hon. Gentleman suggested that it was necessary to widen it in every respect. I do not think that one can take such a simplistic view. In general, there is a strong presumption in favour of widening the tax base.
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However, I quote one example that was mentioned earlier by the hon. Member for Workington (Mr. Campbell-Savours). We are due to debate the business start-up scheme later in Committee. That can be construed as—and in a way it is—a narrowing of the tax base. Will the Social Democratic representative who serves on the Committee be voting against the business start-up scheme on those grounds? We shall see. The width of the tax base is not the only yardstick that one has to use. The hon. Gentleman suggested that the tax base could be increased by the abolition of mortgage interest relief. I am interested to learn that that is the official policy of the Social Democratic Party. I assure the hon. Gentleman that it is not the policy of the Government.
The right hon. Member for Ashton-under-Lyne asked about the cost in terms of Inland Revenue staff. Governments in the past have accepted the principle of making unemployment benefit liable to tax. That is the only way to achieve equity between those in work and those out of work, particularly between those in work for part of the year and those in work for the whole of the year. That is quite apart from the disincentive effect contained in the present system. Nevertheless, previous Governments, including the Labour Government, have shrunk from that decision on the grounds of the number of staff involved.
Towards the end of their period of office, the Labour Government estimated that they would need between 10,000 and 11,000 extra staff to handle the taxing of unemployment and sickness benefit. Of course, sickness benefit is not covered in the Bill, and when that becomes liable to tax it is our intention that it will be done through the employers' statutory sick pay scheme. As a result, there will be negligible staff implications. The number of staff required to deal with the taxation of unemployment benefit will be about one-third the figure which the right hon. Gentleman quoted.

Mr. Robert Sheldon: I take it that that is the gross figure.

Mr. Lawson: Our best estimate of the total number of increased staff required is in the order of 3,500. That must be set against the reduction of 9,000 Revenue staff that we have already secured.

Mr. Robert Sheldon: The right hon. Gentleman will have received the questions that I put to him through his Private Office. They included questions about the number of claims for benefit and the Dependants other than the Inland Revenue in which that extra staff may be found.

Mr. Lawson: I did not receive notice of the first of those two questions. As to his second, in addition to Inland Revenue staff, there will be staff from the Department of Employment, the DHSS and the Northern Ireland DHSS. The lot are included. However, I do not have a breakdown of the figures. If the right hon. Gentleman wishes, he can table some written questions and we shall do our best to answer them. Inevitably, these questions are somewhat speculative, because the figures depend on future levels of threshold, the number of unemployed and so on.
The right hon. Gentleman also asked a number of detailed questions about the 30-day rule and other matters. Those matters come under clause 28 which we shall be debating in Committee upstairs. Indeed, there were no


representations from the Opposition to the effect that we should debate that clause on the Floor of the House. Therefore, we shall come to that clause in due course and we shall be happy to answer his questions at the appropriate time.
The right hon. Gentleman complained that the mechanics of the scheme would be introduced by regulation, and argued that they should be included in a schedule to the Bill. I am surprised that, as a former Treasury Minister, he should make that point, because he must know that all the legislation relating to the mechanics of the PAYE system has been introduced by regulation. The mechanics of PAYE have never been included in the main legislation. We are, therefore, maintaining the practice that has existed since the PAYE system began, which was maintained by the Labour Government.
Nevertheless, the right hon. Gentleman opposed the method that we have chosen to bring unemployment benefit into tax. It is a method that I unhesitatingly commend to the Committee. We are saying that throughout the period in which he is unemployed, a man will receive the gross unemployment benefit with no deduction for tax, nor will he receive any PAYE refunds. When he returns to work or at the end of the financial year, whichever is the sooner, the one will be netted off the other. In 90 per cent. of cases, the amount due in refunds will be greater than the amount which should have been paid in taxation during the period of unemployment. Therefore, when the man returns to work, a small payment will be made to him representing the netted out difference between the two figures. That is a practical and commonsense way of bringing unemployment benefit into tax, and the principle is approved just as much by the Opposition as by the Government.
The right hon. Member for Ashton-under-Lyne said that as a result of the abatement the unemployed will be taxed on what they have not even received. That is not the case. In no way can the unemployed be taxed on a higher rate of benefit than they have received. I am sure that the right hon. Gentleman is aware of that.

Mr. Robert Sheldon: The point that I was trying to make was that these unfortunate people will be denied that money and will find themselves taxed on it. That is what I was objecting to.

Mr. Lawson: They will be taxed on the benefit that they receive, not on the unabated benefit. If that were the case, we would indeed be open to criticism, but that is not the case.
The hon. Member for Edinburgh, Central (Mr. Cooke) asked about the cost of this amendment. It is about £240 million. I must emphasise the size of that figure, because it touches on an earlier point about which the hon. Member for Gateshead, West made some telling comments. The Opposition have already voted on amendments which altogether would cost more than £4 billion. This amendment brings the total to nearly £4¼ billion. If they press the next set of amendments to a vote, the figure will be well over £4½ billion, and this is only the third day of the Committee stage. They are in favour of public expenditure increases as well.
Because of the Opposition's delight for public expenditure, one assumes that they would wish to see public expenditure increased by a similar amount. Therefore, altogether we are talking about an increase in

the PSBR of £9 billion or £10 billion. They support that. In other words, the existing public sector borrowing requirement would be doubled. Do the Opposition have any idea of the consequences for interest rates and, as a result, for industry? Do they have any idea of the inflationary threat that such a borrowing requirement would portend? The Opposition have shown the height of irresponsibility.
However, I do not defend the provision on those grounds alone. Some of the other tax increases in this Budget, notably those on personal allowances, were put to the House with some regret. There was no great merit in them other than the money that they raised, which was vital to the proper conduct of the economy. However, this provision has the merit that there is no reason in principle, why unemployment benefit should not be liable to tax on the grounds of incentive and equity.
I commend the clause to the House. With no apology whatever, I ask the Committee to reject the opportunistic amendment that has been tabled in the name of the official Opposition.

Mr. Richard Wainwright: Although employees' contributions for national insurance are not allowed as a relief for income tax, Liberal Members have long made it clear that, along with most hon. Members, they support the principle of taxing benefits when they cross the tax thresholds. I expected the Financial Secretary to make the case in such a way that we should be able to join him in resisting the amendment. However, he found himself unwilling or unable to give us cause to think that the abatement of benefit—which was explicitly stated by his ministerial colleagues to be a temporary substitute for tax—will be put right when the tax comes into effect. That completely changes the picture.
I am always reluctant to repeat quotations. However, the statement made by the Secretary of State for Social Services in Committee commits the Government. The right hon. Gentleman spoke on the Social Security (No. 2) Bill and said:
The hon. Gentleman asked specifically about abated unemployment benefit. That will make no difference because as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends. It is an interim scheme in lieu of taxation. One will give way to the other." — [Official Report, Standing Committee B, 30 April 1980; c. 526.]
If the Financial Secretary had repeated that without making a detailed legislative commitment, Liberal Members would have been minded to resist the amendment. However, the right hon. Gentleman has been unable to give the Committee an assurance.
I reject the reason that the right hon. Gentleman ostensibly gave for being unable to reassure hon. Members. He said that the matter would have to wait until public expenditure was reviewed. All hon. Members know that many of the public expenditure commitments for 1982–83 are firmly established. The Government know that they cannot avoid them. The idea that £50 million could not be committed at this stage does not hold water, particularly when the Government are to be commended on having largely implemented the admirable principle that the House should be able to discuss revenue and expenditure together.
It is established that we should have the White Paper on public expenditure at the same time as the Budget. What the Financial Secretary has said to excuse his inability to give any commitment on removing the


abatement of benefit is in clear conflict with that. Until the Government state categorically that they intend to honour the commitment so clearly expressed by the Secretary of State for Social Services we cannot possibly help them to protect the clause.

Mr. Cook: At the beginning of the debate the Financial Secretary stated that he would be eccentric and would stick to the terms of the amendment. He ended his speech by going over every amendment that the Committee has considered in the past three days. I should like to nail to the table the canard that the Treasury has produced three times from the Dispatch Box. Indeed, it is something of a tribute to the bankruptcy of the Treasury's arguments that it produces that canard each time that it is called on to defend a proposition. As the Financial Secretary well knows, it is an insult to the intelligence of Committee members to suggest that it is possible to take the sum of the Opposition's amendments and say that it represents their considered and balanced view of what a Budget should be.
Last week I made it perfectly plain that we were moving the amendment on the reduced rate band in the light of the defeat of our amendment to increase tax thresholds. I made it clear that after the Treasury had voted itself £2 billion it was appropriate to consider giving £1 billion back to the low-paid through the reduced rate band. Had our reason, persuasion and eloquence—to which the right hon. Gentleman keeps paying tribute—carried the right hon. Gentleman with us on tax thresholds and had we convinced him of the view that he espoused in 1977, we might not have thought it necessary to move the amendment on the reduced rate band. That knocks £1,100 million from the sum that the right hon. Gentleman mentioned earlier.
In his political interest, the right hon. Gentleman should drop his argument. The Conservative Party waged its election campaign on the basis that the country was groaning under the taxation imposed by a Labour Government. During that campaign there was no suggestion—in the Daily Mail or anywhere else—that the time would come when the right hon. Gentleman would resist Opposition amendments to remove £4 billion of taxation in the interests of fiscal prudence.

Mr. Lawson: I am interested to hear what the hon. Gentleman says. He said that he had made certain remarks earlier. I was not in the Chamber when he did so, but I take his word for it. If he is saying that if the Opposition threshold amendment had been carried they would not have moved their amendment to restore the lower rate band, that is of interest. The figure would then have become not over £4 billion but about £3 billion, plus whatever was pressed to a vote. Will the hon. Gentleman confirm that figure of £3 billion? If not, what is the figure? The Opposition's view of an appropriate Budget judgment and of what they think appropriate in terms of taxation and public expenditure is of some interest to the Committee and to the country. By what total amount would the Opposition seek to reduce taxation and by what amount would they increase public expenditure?

Mr. Cook: I am happy to repeat what has already been said from the Dispatch Box. We do not have a figure. It is well known—this was said several times during the

Budget debate and we do not resile from it—that the Government's Budget judgment reduces the public sector borrowing requirement, in real terms, at a time of unprecedented recession and fall in output. That can only make it more difficult for the economy to expand. Were we to increase public expenditure along the lines that we have consistently argued for—I do not think that the right hon. Gentleman denies our consistency—it would not necessarily result in an equivalent rise in the public sector borrowing requirement.
The Financial Secretary said that he would eccentrically stick to the amendment. Having dealt with his eccentric departure from the amendment, I shall come back to his remarks on it. I entirely acquit him of having spoken—as my hon. Friend the Member for Workington (Mr. Campbell-Savours) feared he might—in a defensive mood. Whatever else he may have been he was not defensive. The passionate, eloquent, well-argued speeches from my hon. Friends on the Back Benches clearly failed to get across our concern, anger and indignation at what the Government are doing to the unemployed. This measure represents the last step in the cumulative process.
The Financial Secretary said that it was common ground among all who took part in the debate that in principle short-term benefits should be taxed. That is so. It has been common ground among all Governments since 1948 that short-term benefits should be subject to tax. It has also been common ground among all Governments since 1949 that there was no way of doing it that was both fair to the claimant and practical to the Treasury. Having heard the Financial Secretary, the Committee must ask whether that way, which has eluded every Government, both Conservative and Labour, since 1949, has now been found by the right hon. Gentleman.
I turn straight away to the figure that the right hon. Gentleman gave to the Committee, which I think surprised and shocked many hon. Members. The right hon. Gentleman—for perhaps the first time under this Government—announced an increase of 3,500 civil servants to implement this clause and the associated clauses. That is, as he generously admitted, 40 per cent. of the number that had been saved by the Treasury in cutting back on civil servants. The hon. Gentleman said that the Treasury had saved 9,000, and 3,500 is 40 per cent. of 9,000.

Mr. Lawson: That was from the Inland Revenue alone. From the Chancellor's Department as a whole the saving has been 130,000— a substantial part of the total saving.

Mr. Cook: How many—130,000?

Mr. Lawson: I am sorry—13,000.

Mr. Cook: If we keep knocking off digits at this rate, we shall soon be below 3,500. I accept the figure of 13,000, but that still leaves us with the fact that in this and the following two clauses we are restoring 25 per cent. of the cuts achieved with considerable difficulty by the right hon. Gentleman and his colleagues during the past two years.
It is perhaps worth recalling what some of those dismissed civil servants did. About 2,000 worked on tax avoidance and tax evasion measures. There is more money to be made by the Treasury from putting the screws on tax avoidance and evasion than will ever be recouped from these three miserable clauses.
There is another provision in the Bill to relax the excise rules. That will result in 400 redundancies among warehouse men and excise men attached to bonded warehouses. As a result, excise duty will virtually become a matter of voluntary tax assessment by the distillers companies.
Last week we had a debate on the reduced rate band. The hon. Member for Colne Valley (Mr. Wainwright) will recall that the question of the number involved in implementing the reduced rate band was raised not by the Opposition but by the Government Front Bench. At that time the Chief Secretary said:
On the administrative costs, which the hon. Member for Colne Valley rather pooh-poohed, the Committee should get the facts on the record and draw its own conclusions. I do not suggest—I very much doubt whether anyone else in my position would—that the administrative cost should be a conclusive consideration, but it is relevant. The Government aim to reduce the proportion of our resources that we spend on administration. The saving of 1,300 staff resulting from the abolition of the lower rate band last year will contribute towards this."—[Official Report, 5 May 1981; Vol. 4, c. 89–90.]
There we have it. Last year the Treasury saved 1,300 staff because it was unwilling to maintain the reduced rate band, which produced a lower marginal rate of tax for the low-paid and softened the introduction of the tax threshold for the low-paid. This year the Treasury is contemplating taking on 3,500 additional staff to increase the tax on the low-paid—indeed, to increase the tax on the unemployed. There is a glaring contrast there between the resources that the Treasury is not prepared to spend to assist the low-paid and the resources that it is prepared to find to wring tax out of the low-paid.
I know, and the Committee in its heart knows, why the Treasury has been able to conquer its prejudice against Civil Service numbers. On this occasion the Treasury has been able to do so because it has been overwhelmed by its even stronger prejudice against the unemployed. We are back to the vision that the Prime Minister held out to the nation in December 1979 about the nation's expanding army of the workshy. One would need a neck of brass to double unemployment as the Government have done—to break the unemployment record of the 1930s—and then to blame it on the unemployed.
My right hon. Friend the Member for Norwich, North (Mr. Ennals) and my hon. Friends the Members for Workington and Batley and Morley (Mr. Woolmer) said that one would have thought that the Government would avoid the introduction of this tax on the unemployed at a time when they have achieved record unemployment.

Mr. Lawson: First, I owe the hon. Gentleman and the Committee an apology. In my zeal to correct the figure of 9,000 I exaggerated somewhat at 13,000. On checking the figure I see that the saving for the Chancellor's Department as a whole is 11,000.
Secondly, the cost will gradually reduce as the computerisation of PAYE, which starts on a pilot basis in 1983, comes into effect. This is the initial cost in terms of staff, and there will be a reducing staff cost.
Thirdly, I should like to get the hon. Gentleman's position clear. Is he opposing the increase because he is wholly in support of our general policy of reducing the size of the Civil Service? Is he in support of that policy? If not, does he believe that the Civil Service should not be reduced? If so, his argument on staff cost seems somewhat paradoxical.

Mr. Cooke: I am encouraged by the rate at which the figures produced by the Treasury for savings on staff have been so rapidly revised in a downward direction. We began with 130,000; we moved rapidly to 13,000, and now we are down to 11,000. It will be some time yet before I conclude. We look forward with interest to what the figure is when I sit down.
Returning to the last point made by the Financial Secretary in his generous intervention, it has not been any part of our argument that we should hire civil servants for the sake of it. Equally, we believe that there is no argument for laying off civil servants to massage the figures downward for electoral purposes. We firmly take the view that we should increase the size of the Civil Service only where the result will be efficacious and effective. To take on 3,500 additional civil servants for this purpose is not effective or reasonable, especially when that suggestion comes from a Government who have laid off 2,000 tax inspectors working on tax avoidance who netted a far larger sum than will be netted by these 3,500.
My hon. Friend the Member for Batley and Morley made a point that I think weighs heavily with every Opposition Member who has taken part in the debate. We have so many unemployed now not because they are workshy or better off on the dole but because jobs are not available. The Prime Minister visited Perth last week. She made a stirring speech, in which she referred to sunny uplands just over the horizon and to living in a land of hope, if not of glory. On the day that the right hon. Lady spoke in Perth the jobcentre there had an advertisement for only one dozen vacancies—every one of them in Saudi Arabia. That is the reality in respect of the jobs available for the young unemployed in Perth. It is not that they are workshy or scroungers; the jobs are not there.
My hon. Friend the Member for Batley and Morley referred to the PSI study, which established that just over 3 per cent. of male unemployed are better off unemployed than in work. There was another figure in that study that particularly stood out. The study found that only 12 per cent. of the unemployed covered by the survey had turned down the offer of a job in the first six weeks of unemployment. Putting it the other way round, 88 per cent. of those offered any job in the first six weeks took it. In half of those cases of the 88 per cent. who took a job, the job was worse paid than the job that they had held before, but they took it to get out of unemployment.
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That is the reality of the situation. Yet the Government—we recognise it—remain obsessed with the mythical problem of the "Why work?" syndrome. I can understand why the Government are sensitive about the problem of the "Why work?" syndrome. They are sensitive about it because they themselves have done more to worsen the poverty trap than any Government since the last war. Last year they deepened the trap by abolishing the reduced rate band. This year they have widened the trap by not upping the tax thresholds.
I can tell my hon. Friends and the hon. Member for Colne Valley why it is that the Government cannot make a commitment to restore the 5 per cent. abatement. The reason why they cannot up the unemployment benefit by 5 per cent. is that, having failed to increase the tax thresholds, if they were now to up unemployment benefit


by 5 per cent. they would thrust tens of thousands more people into the poverty trap, who then would find that it was better to be out of work than to be in work.
The Government were pressed very strongly on the issue of the 5 per cent. abatement—not a cut, but an abatement, as we were assured. A number of hon. Members referred to the statement by the Secretary of State for Social Services, who said that
as the unemployment benefit comes into tax so the rationale for the 5 per cent. abatement ends."—[Official Report, Standing Committee B, 30th April 1980; c. 526.]
The hon. Member for Anglesey (Mr. Best)—I am sorry that he has not been in the Chamber since he finished speaking—quoted the Under-Secretary for Health and Social Security, who said:
It is a temporary measure pending taxation which all parties in the House have greed."—[Official Report, 3 February 1981; Vol. 998, c. 140.]
I am bound to say that the hon. Lady took something of a liberty with the other parties in the House, since all the other parties in the House voted against it, but I presume that we are taken to have agreed, since we lost because the right hon. Gentleman called out his troops.
We have not had the advantage of an intervention from the Secretary of State for Social Services. Throughout most of the debate we have had the attendance of his Minister—who, for most of the debate, was kept two Treasury spokesman seats away from the Dispatch Box just in case he should be tempted to break his silence and make a rash commitment to spend money on upping unemployment benefit by 5 per cent.
It is grossly unfair for the Committee to be asked to vote the money that will arise out of taxation and then be told that the Goxernment will think about what they will do about the 5 per cent. abatement that was imposed last year on the basis that taxation was round the corner. It will not do, for the reason to which the right hon. Gentleman referred in his reply. As he clearly admitted, the resources are there. They arise under this clause, apart from anywhere else. As the right hon. Gentleman said, he will benefit by £240 million from the clause, and it will cost £50 million to restore the 5 per cent. to the unemployed.
In all candour and in all decency, the first call on the £240 million that the right hon. Gentleman is getting out of this clause has to be the restoration of the 5 per cent. abatement from the very people whom he is now taxing.
The Chancellor of the Exchequer, during his reply to the Budget debate, responded to a characteristically trenchant intervention by my hon. Friend the Member for Keighley (Mr. Cryer). In his response the Chancellor said:
Conservative Members are as much concerned about the unemployed as anyone else."—[Official Report, 16 March 1981; Vol. 1, c. 96.]
I am very glad that we have the Chancellor's word for it, because we could not have divined it from what he has done over the past two years. During that period his Government abolished earnings-related supplement for the unemployed. Last year he cut unemployment benefit by 4 per cent. This year, in a Bill that we shall be debating again later this week, the Government are to cut a further 1 per cent. off unemployment benefit in order that they can get their full 5 per cent. of flesh from the unemployed. That is the record of the past two years.
If the Chancellor is really concerned about the unemployed as much as anyone else, he now has the

opportunity to remedy part of the problem and assure the Committee that if we pass this provision for taxation of unemployment benefit he will restore the 5 per cent. that was taken from the unemployed on the pretence that they were to be taxed and that this was in lieu of taxation.
If we cannot have that assurance, I do not think that my hon. Friends and I have any alternative but to vote against the clause by voting for our amendment. In doing so it is relevant to draw to the Committee's attention to one last contrast that is presented to us in the Bill. The Financial Secretary suggested that the entire thrust of our concern about the Bill was simply with those places where additional tax was imposed. I must put it back to the Financial Secretary.
If we look at the Finance Bill as a whole we find that there is one other fresh inequity that arises from it, even among the unemployed. There is another clause—clause 31—that provides additional relief for those who are made redundant and get a golden handshake. At present they can get £10,000 without paying tax. Ten thousand pounds is a very generous figure. Indeed, the same study as that to which my hon. Friend the Member for Batley and Morley referred discovered that only 5 per cent. of those made redundant received a payment from the employer exceeding £2,000. A very small percentage received £10,000.
Clause 31 ups that figure of tax-free golden handshakes from £10,000 to £25,000. That is where the Chancellor's concern for the unemployed is. It is for that tiny proportion of the unemployed who get golden handshakes of £25,000. They are the people for whom the Government have found the money. They are the people who represent the social priorities of the Government. Those social priorities are repugnant to Opposition Members and we shall repudiate them in a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 210, Noes 275.

Division No. 174]
[6.37 pm


AYES


Abse, Leo
Conlan, Bernard


Adams, Allen
Cook, Robin F.


Allaun, Frank
Cowans, Harry


Anderson, Donald
Craigen, J. M.


Archer, Rt Hon Peter
Crowther, J. S.


Ashley, Rt Hon Jack
Cryer, Bob


Ashton, Joe
Cunliffe, Lawrence


Atkinson, N.(H'gey,)
Cunningham, G. (Islington S)


Bagier, Gordon A.T.
Cunningham, Dr J. (W'h'n)


Barnett, Guy (Greenwich)
Dalyell, Tam


Barnett, Rt Hon Joel (H'wd)
Davidson, Arthur


Benn, Rt Hon A. Wedgwood
Davies, Rt Hon Denzil (L'lli)


Bennett, Andrew(St'kp't N)
Davies, Ifor (Gower)


Bidwell, Sydney
Davis, Clinton (Hackney C)


Booth, Rt Hon Albert
Davis, T. (B'ham, Stechf'd)


Boothroyd, Miss Betty
Deakins, Eric


Bray, Dr Jeremy
Dean, Joseph (Leeds West)


Brown, R. C. (N'castle W)
Dempsey, James


Brown, Ron (E'burgh, Leith)
Dewar, Donald


Buchan, Norman
Dixon, Donald


Callaghan, Rt Hon J.
Dobson, Frank


Callaghan, Jim (Midd't'n &amp; P)
Dormand, Jack


Campbell, Ian
Douglas-Mann, Bruce


Campbell-Savours, Dale
Dubs, Alfred


Canavan, Dennis
Duffy, A. E. P.


Cant, R. B.
Dunn, James A.


Carmichael, Neil
Dunnett, Jack


Carter-Jones, Lewis
Dunwoody, Hon Mrs G.


Clark, Dr David (S Shields)
Eadie, Alex


Cocks, Rt Hon M. (B'stol S)
Eastham, Ken


Coleman, Donald
Ellis, R. (NE D'bysh're)


Concannon, Rt Hon J. D.
English, Michael






Ennals, Rt Hon David
Morris, Rt Hon A. (W'shawe)


Evans, loan (Aberdare)
Morris, Rt Hon C. (O'shaw)


Evans, John (Newton)
Morris, Rt Hon J. (Aberavon)


Ewing, Harry
Morton, George


Field, Frank
Oakes, Rt Hon Gordon


Fitt, Gerard
Ogden, Eric


Flannery, Martin
O'Halloran, Michael


Fletcher, Ted (Darlington)
O'Neill, Martin


Foot, Rt Hon Michael
Orme, Rt Hon Stanley


Ford, Ben
Palmer, Arthur


Forrester, John
Parry, Robert


Foster, Derek
Prescott, John


Fraser, J. (Lamb'th, N'w'd)
Price, C. (Lewisham W)


Garrett, John (Norwich S)
Race, Reg


George, Bruce
Radice, Giles


Gilbert, Rt Hon Dr John
Rees, Rt Hon M (Leeds S)


Ginsburg, David
Richardson, Jo


Graham, Ted
Roberts, Albert (Normanton)


Grant, George (Morpeth)
Roberts, Allan (Bootle)


Hamilton, W. W. (C'tral Fife)
Roberts, Ernest (Hackney N)


Harrison, Rt Hon Walter
Roberts, Gwilym (Cannock)


Hattersley, Rt Hon Roy
Robertson, George


Healey, Rt Hon Denis
Robinson, G. (Coventry NW)


Heffer, Eric S.
Rooker, J. W.


Hogg, N. (E Dunb't'nshire)
Ross, Ernest (Dundee West)


Holland, S. (L'b'th, Vauxh'll)
Rowlands, Ted


Homewood, William
Ryman, John


Howell, Rt Hon D.
Sever, John


Hudson Davies, Gwilym E.
Sheerman, Barry


Hughes, Mark (Durham)
Sheldon, Rt Hon R.


Hughes, Robert (Aberdeen N)
Shore, Rt Hon Peter


Hughes, Roy (Newport)
Short, Mrs Renée


Janner, Hon Greville
Silkin, Rt Hon J. (Deptford)


Jay, Rt Hon Douglas
Skinner, Dennis


John, Brynmor
Smith, Rt Hon J. (N Lanark)


Johnson, James (Hull West)
Snape, Peter


Jones, Rt Hon Alec (Rh'dda)
Soley, Clive


Jones, Barry (East Flint)
Spearing, Nigel


Jones, Dan (Burnley)
Spriggs, Leslie


Kaufman, Rt Hon Gerald
Stallard, A. W.


Kerr, Russell
Stewart, Rt Hon D. (W Isles)


Kilroy-Silk, Robert
Stoddart, David


Kinnock, Neil
Stott, Roger


Lambie, David
Straw, Jack


Lamborn, Harry
Summerskill, Hon Dr Shirley


Leadbitter, Ted
Thomas, Dafydd (Merioneth)


Leighton, Ronald
Thomas, Jeffrey (Abertillery)


Lestor, Miss Joan
Thomas, Dr R.(Carmarthen)


Lewis, Arthur (N'ham NW)
Thorne, Stan (Preston South)


Litherland, Robert
Tilley, John


Lyon, Alexander (York)
Tinn, James


Mabon, Rt Hon Dr J. Dickson
Torney, Tom


McCartney, Hugh
Wainwright, E.(Dearne V)


McElhone, Frank
Walker, Rt Hon H.(D'caster)


McKay, Allen (Penistone)
Watkins, David


McKelvey, William
Weetch, Ken


MacKenzie, Rt Hon Gregor
Wellbeloved, James


McMahon, Andrew
Welsh, Michael


McNally, Thomas
White, Frank R.


McNamara, Kevin
White, J. (G'gow Pollok)


McWilliam, John
Whitlock, William


Magee, Bryan
Wigley, Dafydd


Marks, Kenneth
Willey, Rt Hon Frederick


Marshall,D(G'gow S'ton)
Williams, Rt Hon A.(S'sea W)


Marshall, Dr Edmund (Goole)
Wilson, Rt Hon Sir H.(H'ton)


Marshall, Jim (Leicester S)
Wilson, William (C'try SE)


Martin, M(G'gow S'burn)
Winnick, David


Mason, Rt Hon Roy
Woodall, Alec


Maxton, John
Woolmer, Kenneth


Maynard, Miss Joan
Wright, Sheila


Mellish, Rt Hon Robert
Young, David (Bolton E)


Mikardo, Ian



Millan, Rt Hon Bruce
Tellers for the Ayes:


Mitchell, Austin (Grimsby)
Mr. James Hamilton and Mr. Frank Haynes.


Mitchell, R. C. (Soton Itchen)





NOES


Adley, Robert
Alison, Michael


Aitken, Jonathan
Amery, Rt Hon Julian


Alexander, Richard
Ancram, Michael





Aspinwall, Jack
Gardner, Edward (S Fylde)


Atkins, Robert(Preston N)
Garel-Jones, Tristan


Baker, Kenneth(St.M'bone)
Gilmour, Rt Hon Sir Ian


Baker, Nicholas (N Dorset)
Glyn, Dr Alan


Banks, Robert
Goodlad, Alastair


Bell, Sir Ronald
Gow, Ian


Bendall, Vivian
Gower, Sir Raymond


Benyon, Thomas (A'don)
Gray, Hamish


Benyon, W. (Buckingham)
Greenway, Harry


Berry, Hon Anthony
Griffiths, E.(B'y St. Edm'ds)


Best, Keith
Griffiths, Peter Portsm'th N)


Bevan, David Gilroy
Grist, Ian


Biggs-Davison, John
Grylls, Michael


Blackburn, John
Hamilton, Hon A.


Blaker, Peter
Hamilton, Michael (Salisbury)


Body, Richard
Hampson, Dr Keith


Bonsor, Sir Nicholas
Hannam, John


Bowden, Andrew
Haselhurst, Alan


Boyson, Dr Rhodes
Hastings, Stephen


Braine, Sir Bernard
Havers, Rt Hon Sir Michael


Bright, Graham
Hawksley, Warren


Brinton, Tim
Hayhoe, Barney


Brittan, Leon
Heddle, John


Brooke, Hon Peter
Henderson, Barry


Brotherton, Michael
Heseltine, Rt Hon Michael


Brown, Michael(Brigg &amp; Sc'n)
Hicks, Robert


Browne, John (Winchester)
Higgins, Rt Hon Terence L.


Bruce-Gardyne, John
Holland, Philip (Carlton)


Bryan, Sir Paul
Hooson, Tom


Buchanan-Smith, Alick
Hordern, Peter


Buck, Antony
Howell, Rt Hon D. (G'ldf'd)


Budgen, Nick
Hunt, David (Wirral)


Bulmer, Esmond
Hunt, John (Ravensbourne)


Burden, Sir Frederick
Hurd, Hon Douglas


Butcher, John
Jenkin, Rt Hon Patrick


Cadbury, Jocelyn
Johnson Smith, Geoffrey


Carlisle, John (Luton West)
Jopling, Rt Hon Michael


Carlisle, Kenneth (Lincoln)
Kaberry, Sir Donald


Carlisle, Rt Hon M. (R'c'n)
Kellett-Bowman, Mrs Elaine


Chalker, Mrs. Lynda
Kimball, Marcus


Channon, Rt. Hon. Paul
King, Rt Hon Tom


Chapman, Sydney
Kitson, Sir Timothy


Churchill, W. S.
Knox, David


Clark, Hon A. (Plym'th, S'n)
Lamont, Norman


Clark, Sir W. (Croydon S)
Langford-Holt, Sir John


Clarke, Kenneth (Rushcliffe)
Latham, Michael


Clegg, Sir Walter
Lawrence, Ivan


Cockeram, Eric
Lawson, Rt Hon Nigel


Colvin, Michael
Lee, John


Cope, John
Le Marchant, Spencer


Corrie, John
Lennox-Boyd, Hon Mark


Cranborne, Viscount
Lewis, Kenneth (Rutland)


Critchley, Julian
Lloyd, Ian (Havant &amp; W'loo)


Crouch, David
Lloyd, Peter (Fareham)


Dean, Paul (North Somerset)
Loveridge, John


Dickens, Geoffrey
Luce, Richard


Dorrell, Stephen
Lyell, Nicholas


Dover, Denshore
McCartney, Hugh


du Cann, Rt Hon Edward
McCrindle, Robert


Dunn, Robert (Dartford)
Macfarlane, Neil


Dykes, Hugh
MacGregor, John


Eden, Rt Hon Sir John
MacKay, John (Argyll)


Edwards, Rt Hon N. (P'broke)
Macmillan, Rt Hon M.


Eggar, Tim
McNair-Wilson, M. (N'bury)


Emery, Peter
McNair-Wilson, P. (New F'st)


Eyre, Reginald
McQuarrie, Albert


Fairgrieve, Russell
Madel, David


Faith, Mrs Sheila
Major, John


Fell, Anthony
Marland, Paul


Fenner, Mrs Peggy
Marlow, Tony


Fisher, Sir Nigel
Marshall, Michael (Arundel)


Fletcher, A. (Ed'nb'gh N)
Mather, Carol


Fookes, Miss Janet
Maude, Rt Hon Sir Angus


Forman, Nigel
Mawby, Ray


Fowler, Rt Hon Norman
Mawhinney, Dr Brian


Fox, Marcus
Maxwell-Hyslop, Robin


Fraser, Rt Hon Sir Hugh
Mayhew, Patrick


Fraser, Peter (South Angus)
Mellor, David


Fry, Peter
Meyer, Sir Anthony


Gardiner, George (Reigate)
Miller, Hal (B'grove)






Mills, Peter (West Devon)
Sims, Roger


Miscampbell, Norman
Skeet, T. H. H.


Moate, Roger
Speed, Keith


Monro, Hector
Speller, Tony


Moore, John
Spicer, Michael (S Worcs)


Morris, M. (N'hampton S)
Sproat, lain


Morrison, Hon C. (Devizes)
Squire, Robin


Morrison, Hon P. (Chester)
Stanbrook, Ivor


Mudd, David
Stanley, John


Murphy, Christopher
Steen, Anthony


Myles, David
Stevens, Martin


Neale, Gerrard
Stewart, Ian (Hitchin)


Needham, Richard
Stewart, A.(E Renfrewshire)


Nelson, Anthony
Stokes, John


Neubert, Michael
Stradling Thomas, J.


Newton, Tony
Tapsell, Peter


Normanton, Tom
Taylor, Robert (Croydon NW)


Onslow, Cranley
Taylor, Teddy (S'end E)


Page, Rt Hon Sir G. (Crosby)
Tebbit, Norman


Page, Richard (SW Herts)
Temple-Morris, Peter


Parkinson, Cecil
Thomas, Rt Hon Peter


Parris, Matthew
Thompson, Donald


Patten, Christopher (Bath)
Thorne, Neil (llford South)


Patten, John (Oxford)
Thornton, Malcolm


Pattie, Geoffrey
Townend, John (Bridlington)


Pawsey, James
Townsend, Cyril D, (B'heath)


Percival, Sir Ian
Trippier, David


Peyton, Rt Hon John
Trotter, Neville


Pink, R. Bonner
van Straubenzee, W. R.


Porter, Barry
Vaughan, Dr Gerard


Powell, Rt Hon J.E. (S Down)
Viggers, Peter


Prentice, Rt Hon Reg
Waddington, David


Proctor, K. Harvey
Wakeham, John


Pym, Rt Hon Francis
Waldegrave, Hon William


Raison, Timothy
Walker, B. (Perth)


Rathbone, Tim
Walker-Smith, Rt Hon Sir D.


Rees, Peter (Dover and Deal)
Wall, Patrick


Rees-Davies, W. R.
Waller, Gary


Renton, Tim
Walters, Dennis


Rhodes James, Robert
Warren, Kenneth


Ridley, Hon Nicholas
Watson, John


Ridsdale, Sir Julian
Wells, John (Maidstone)


Rifkind, Malcolm
Wells, Bowen


Roberts, M. (Cardiff NW)
Wheeler, John


Roberts, Wyn (Conway)
Whitelaw, Rt Hon William


Rossi, Hugh
Whitney, Raymond


Rost, Peter
Wickenden, Keith


Royle, Sir Anthony
Williams, D.(Montgomery)


Sainsbury, Hon Timothy
Winterton, Nicholas


Scott, Nicholas
Wolfson, Mark


Shaw, Giles (Pudsey)
Young, Sir George (Acton)


Shaw, Michael (Scarborough)
Younger, Rt Hon George


Shelton, William (Streatham)



Shepherd, Colin (Hereford)
Tellers for the Noes:


Shepherd, Richard
Lord James Douglas-Hamilton and Mr. Robert Boscawen.


Shersby, Michael



Silvester, Fred

Question accordingly negatived.

Mr. Cook: I beg to move amendment No. 20, in page 15, line 17, leave out subsection (2).

The Temporary Chairman (Sir Albert Costain): With this we shall take the following amendments: No.59, in page 15, line 42, at end insert
'less any deduction made under section 6 of the Social Security (No. 2) Act 1980'.
No. 21, in page 16, line 10, leave out from first 'the'to 'and' in line 14 and insert
'amount specified in paragraph (a) above'.
No. 22, in page 16, line 15, leave out 'the' and insert
'amount specified in paragraph (a) above'.

Mr. Cook: We shall concentrate on amendments Nos. 20 and 59, which we regard as matters of substance. The two amendments grouped with them are a modest attempt to simplify the clause, by standardising the amount liable

to taxation in each case. We hope that that will make a reasonable contribution to reducing paper-chasing and limiting the 3,500 staff, about whom we are so grievously concerned.
Amendments Nos. 20 and 59 go to the heart of two matters about which the Opposition are concerned and about which the whole Committee should be concerned. The Financial Secretary said in his reply to the previous debate that it was common ground that short-term benefits—unemployment benefit and sickness benefit—should in principle be subject to tax. We concede that principle, but we disagree about whether this is the proper, right, just and practical way to go about it.
There is no common ground between the Opposition and the Government about taxation of supplementary benefit paid to the dependants of a striker. That is a petty, vindictive and mean gesture, which we reject, not simply because of its practical implications, but in principle.
Our first reason is that the proposal imports into the tax law the principle that supplementary benefit payments should be subject to taxation. We understand that, as a result of the subsection on which we have just voted, it is now inescapable that unemployed families receiving supplementary benefit because they are unemployed will come within the ambit of taxation. We understand why. One of the anomalies that embarrassed the Government when they started to examine the taxation of unemployment benefit was that if they merely taxed unemployment benefit they would create the paradoxical result that the family that had paid its contributions over the preceding year, and therefore qualified for unemployment benefit, would be subject to tax, whereas the head of household who had not paid contributions over the preceding year, and therefore did not qualify for unemployment benefit, would not be subject to tax on supplementary benefit.
It was therefore necessary—we understand and accept why—explicitly to provide in the clause for the taxation of supplementary benefit paid to the unemployed person. That is inescapable, but it is not inescapable that supplementary benefit paid to a striker should be subject to tax. There is no necessary link or comparison between the unemployed person and the person on strike, who by definition is an employed person temporarily out of work. Indeed, many categories are in receipt of supplementary benefit and are not employed.
There are the sick, who either receive supplementary benefit to top up their sickness benefit or receive it in lieu of sickness benefit, because they are out of contribution. There are the pensioners, just over half of whom receive a supplementary pension to top up their State pension. If for any reason they do not qualify for the State pension, they qualify for a supplementary pension to its entire value. The disabled either qualify for supplementary benefit to top up such benefit as they receive or receive a supplementary benefit entirely to make up those national insurance benefits. Finally, there is the large, growing and now significant group claiming supplementary benefit who are single parents entirely dependent on supplementary benefit for their income.
Of all those categories in receipt of supplementary benefit, the Government have chosen for the special treatment of taxation only those receiving supplementary benefit because they are on strike. Why have the Government chosen them? Why have they picked on that group? It cannot be because that group makes up a


significant number of those receiving supplementary benefit, because strikers are a tiny proportion of the total number receiving it. Never in the past few years have those on strike receiving supplementary benefit made up more than 2 per cent. of all claimants of supplementary benefit. They are a small proportion of the total. It follows that the revenue from taxing those people's benefit will be miserable.
That brings us to a further question. How much will the Financial Secretary get from this miserly measure? There is another question that we naturally couple with that: how much will it cost? If it is difficult to administer the taxation of the unemployment benefit, it is surely far more difficult to administer the taxation of the supplementary benefit paid to a striker's family. In the nature of things, the striker tends to be out of work for a much shorter period than the unemployed person. Therefore, far more paper-chasing is involved per week of benefit. Indeed, the paper will have to chase itself rapidly if it is ever to catch up before the man returns to work.
The truth is that this measure is not put before the Committee either because strikers make up a large proportion of the whole number on supplementary benefit or because it is hoped to obtain revenue from it. It is put forward because the Treasury Bench are adopting, as part of the Government's general approach, what can be described in plain English only as a vindictive attitude towards the person on strike.
We have already seen what the Government's vindictive attitude towards the striker can mean—the deduction of £12 from the supplementary benefit paid to him to support his family. It has been asserted, not in the Committee but outside the House, to the press and other media when the Bill was unveiled that what will be taxed as a result of the clause is the flat rate benefits, not the additions for heating, rent or child additions. On the day the Bill was published the Board of Inland Revenue issued a press release in which it said:
In the case of strikers, the benefit to be taxed is the supplementary benefit which a striker may claim in respect of an adult dependant. …
As was announced last year, additions to unemployment and supplementary benefit, for children, housing and exceptional circumstances, are not to be brought into the charge to tax.
That assurance is humbug. The board is plainly mistaken with reference to the striker.
I can demonstrate why. Let us take two strikers' families. I do not want to cause any offence, so let us for the sake of example call them Rees and Lawson, who have come out in opposition to their employer for some reason.
Mr. Rees has a wife and no children. He therefore qualifies for £18·60 as from next November in respect of his wife, who is the, adult dependant referred to in the board's press statement. However, as a result of the Social Security (No. 2) Act 1980, £12 is now knocked off that sum, leaving him with £6·60, on which he will be taxed under the clause. I do not wish to speculate on how he and his wife are to survive on £6·60 a week; I merely take the implications of the clause.
Mr Lawson receives the £6·60 in respect of his wife, but he also has two children aged 4 and 5. Therefore, he qualifies for an additional £14·60 child addition, which when added to the £6·60, takes him back beyond the flat rate level for the adult dependant, and it is at that level that he is taxed. The effect of the £12 deduction is to make the first £12 of his child addition taxable. It must have that

effect, because there is nothing else left to tax once the £12 has been deducted from the flat rate for the adult dependant.
Thus we can see from this illustrative example that the striker is subject to even more special treatment than at first appears from the clause. Not only is he singled out among claimants of supplementary benefit for the treatment of taxation, but he will be penalised by tax even more than the unemployed because in his case the child additions will be taxed, not the flat rate for the adult dependant. Even the toddlers of the striker will be subject to tax on the income which they receive from the State.
7 pm
It may be necessary at this stage to pinch ourselves and to remind ourselves what supplementary benefit is. It is an income set by Parliament as a basic subsistence income. It represents the poverty line. Academics accept the level of supplementary benefit as the poverty line, which defines the numbers living in poverty as those who are below it and the numbers not living in poverty as those who are above it.
There is a profound paradox that Parliament should now be asked to make special provision to bring into tax the very income which Parliament has decided is the bare minimum necessary to give subsistence life.
It is also perhaps necessary to remind ourselves what the child addition is. It represents the estimate of Parliament, based on the calculations put to it formerly by the Supplementary Benefits Commission and now by the Department of Health and Social Security, of the cost of feeding and warming a child. It is not income in the strict sense. It is the expense necessary to feed a child so that it grows and to clothe it so that it can go to school.
Families on supplementary benefit find it difficult to achieve that on the level of income which they obtain from supplementary benefit, even with those child additions. Yet it is exactly those child additions which are to be taxed under this subsection. To use what appears to be a vogue phrase, that proposition must be distasteful to all right-minded people. If we cannot in this debate persuade the Financial Secretary of the iniquity of that proposition, we must demonstrate our distaste by voting in favour of amendment No. 20.

Mr. Lawson: The hon. Member for Edinburgh, Central (Mr. Cook) concentrated on amendments Nos. 20 and 59. I shall do the same.
Amendment No. 20 is a curious proposal to have tabled. As I understand it, the hon. Gentleman accepts in principle the taxation of supplementary benefit for the unemployed. As he rightly pointed out, it would be absurd if one man was getting unemployment benefit and paid tax on it, as I described in our last debate, while another man who was also unemployed was getting supplementary benefit because, for example, he had not paid sufficient contributions, and was not being taxed. So clearly the unemployed have to be on the same footing whether they receive unemployment benefit or supplementary benefit. That is one of the main elements in this subsection which the Opposition seek to delete.
I should say that the total cost of the amendment is about £130 million.
It appears that the Opposition are concerned about the position not so much of the unemployed person on supplementary benefit as of the striker on supplementary benefit. If the hon. Member for Edinburgh, Central wished


to concentrate on strikers, I am surprised that he did not table an amendment addressing itself specifically to them rather than one dealing with the general subject of taxation of supplementary benefit to the unemployed and strikers. But I understand now that the specific objection of the Opposition is to the treatment of strikers, and it is in this context, too that they tabled amendment No. 59 which concerns a detailed point on the position of the striker.
Before coming to the general question, perhaps I should address myself to amendment No. 59. The hon. Member for Edinburgh, Central, suggests that the £12 reduction applies only to the claimant's adult dependant and therefore the extra supplementary benefit which the striker and his family are getting should not be taken into account in assessing how much of the benefit should be liable to tax.
That is not the view taken by the Government. We believe that the only logical way of approaching this is that, where the total amount that the claimant is getting is in excess of the basic £17·05, as it is at present, that basic amount should be liable to tax.
However, the general point made by the hon. Member for Edinburgh, Central—that supplementary benefit is set at subsistence level and therefore should not be taxed—falls to the ground because of the method that we have chosen. Our method does not take money from a man on supplementary benefit during the time that he is drawing supplementary benefit. In the case of the striker, the liability is taken into account when he returns to work so that the subsistence is paid in the same way.
There is a general issue of principle here. The hon. Gentleman asks why strikers should be treated in this way when others on supplementary benefit are not. He is asking, in other words, what is special about strikers.
Two features are special about strikers. One is that strikes do great damage to our economy. Another is that, unlike the many other disabilities mentioned by the hon. Gentleman, strikes are voluntary. People go on strike voluntarily and specifically to improve their financial position. They have a right to do so in a free society, but the nature of what they are doing is quite different from that of the various other matters mentioned by the hon. Gentleman.
The Opposition's attitude is interesting. Whereas they accept in principle—they may have arguments about the method—the taxing of unemployment benefit and supplementary benefit for the unemployed, they reject in principle the taxation of supplementary benefit for strikers. They are saying, in other words, that the striker should be better off than the man who is unemployed. That is where they stand, and the Committee and the country will know it. The Government reject it.

Mr. Woolmer: I wish to take up two of the remarks made by the Financial Secretary.
I found it extremely interesting that when pushed, with his back metaphorically against the wall, the hon. Gentleman brought out the truth. He was only too happy to justify taxing the supplementary benefit of strikers because, he said, strikers damaged the country and strikes were voluntary.
Perhaps I may spend a few moments looking at that motivation. It is a fact that the damage done by this Government to the country in terms of lost output, the

collapse of manufacturing industry, the loss now of export markets and the loss of our own industries' markets to foreign competition is far greater than the damage done by strikes since this Government came to office.
The Financial Secretary has the gall at this time in our nation's history to repeat the pre-election rhetoric of which he should now be ashamed. He openly boasts and is proud of the claim that this clause is necessary, by implication, to teach strikers a lesson and to make sure that they suffer greater hardship. That, I suggest, is one reason why we should be on our guard against accepting the Government's proposals. At root, the matter has nothing to do with equity or a fine tuning of the taxation system. It is a political decision to rub the noses of strikers and their families in financial hardship.
Strikers and their families suffer financial hardship that few people in work appreciate. The Financial Secretary cannot think—I do not believe that he does—that most people enter into a strike lightly and ignore or take lightly the financial consequences. Strikes are only a last resort. Workers do their utmost to avoid going on strike, not just for industrial relations reasons, but because of the financial hardship that they suffer.
I reject the motivation that the Financial Secretary revealed in his outburst when he said that strikers damage the country and that they should therefore be taught a lesson. That is not true. Most strikers are only too pleased to get back to work, partly for financial reasons and partly because people want to work.
The second reason given by the Financial Secretary—it is the substance of his reason for opposing the amendment—was that strikes are voluntary, and that in some way that justifies penalising them. Conservatives often say that they are the party of freedom and that choice is essential. However, strikers do not revel in the use of the strike weapon. They do not take it lightly. Strikes are voluntary, of course, in that people have the right to strike, although many Conservative Members would like to restrict that right and the voluntary nature of that action. Often, workers are forced into striking. Strikes are uncommon in industries such as the textile industries, but that has done little to save jobs or to prevent the deterioration of living standards.
People who strike do so out of desperation and only when there is a serious situation. The Government say that the strikers' action is voluntary and that inadequate management or poor industrial relations should not be held responsible. They say that the person whose only weapon is to withdraw his labour should be penalised. That is the kind of one-sided view that causes strikes and is typical of the Government and many of their more hawkish Back Benchers. The remarks of the right hon. Gentleman, who is a leading Conservative Member—it is perhaps only by chance that he is not a member of the Cabinet—will be remembered.

Mr. Lawson: In going through the reasons that I gave, will the hon. Gentleman address himself to the culminating reason—namely, that not to do this would put the striker in a much better position than people who are unemployed, and that, in equity, those strikers should be no better off than the man who is unemployed?

Mr. Woolmer: People are adversely affected, whether in work or out of work on supplementary benefit, because


the Government—and, indeed, the Financial Secretary himself—have refused to uprate benefits and have deepened and widened the poverty trap.
I do not intend to be lectured or hectored about the merits or otherwise of the problems of the low incomes that we are discussing. The Financial Secretary revealed, as tends to happen when he gets enthusiastic, that his true motive was to get at strikers. In his outburst against strikers he picked on them on a perjorative manner, and said that the person withdrawing his labour should be penalised, and that the firm or employer is not to be penalised. That is to take a one-sided view of industrial relations, regardless of the merits of the situation.
One aspect has not been mentioned, and that is that the supplementary benefit, as my hon. Friend the Member for Edinburgh, Central (Mr. Cook) said belongs as of right to the family. The purpose is not to give a high standard of living or even a modest standard of living, but to cover the bare essentials of life for the children and the wife of the person involved. Precious few in this Chamber, if any, could face a period of living on the incomes that we are talking about, with no wage packet coming in, and with supplementary benefit being the sole pay for the family.
I reject the notion that in a Finance Bill we should take a one-sided view of industrial relations and economic problems. Yet the Financial Secretary has made it plain that that is at the root of his thinking in seeking to tax supplementary benefit for strikers.

Mr. Austin Mitchell: The principle underlying the amendment is exactly the same as the principle of the amendment that we tabled on taxing unemployment benefit. Two years ago the Government gave away massive tax cuts to the better-off in the hope of stimulating initiative and enterprise. The hope did not materialise, the stimulus was not there, and the economy has gone downhill since. Now the Government have the nerve to come back to the less well-off sections of the community—the unemployed, the people on supplementary benefits, the strikers—and say "You will have the privilege of paying for the failure of the grand hopes that we held out two years ago". It is typical that they ask those who are least able to bear the burden.
In this case there is an extra twist—the lemon in the gin and tonic—in the vindictive attitude of the Financial Secretary towards strikers. His whole defence is based on a far-fetched and fictitious argument that in resisting the principle of taxation of benefits for strikers, the Opposition are saying "We want to support strikers and we think it unreasonable that strikers should be taxed". Rarely have I heard a more far-fetched and ridiculous argument.
We oppose the measure because it is mean, vindictive and unnecessary. We have no other reason for opposing it. Strikes are the Government's fig leaf. They justify such petty vindictiveness and so much else of the Government's economy policy. In two years the Government have steered us deliberately into the worst depression that the country has faced since the war and the biggest drop in industrial output since 1929 to 1931.
We must ask why the Government have done that. They say that it is to combat inflation. The logic of that is that as soon as the pressures are taken off and some mild expansion is allowed inflation will take off automatically again. They have economic permafrost. That is their way of defeating inflation.
We should be insulated from the world depression, since we are an oil Power We should not be going into a depression faster and deeper than any other industrial country is going in. The Government are imposing a discipline on the work force. They want to break the industrial power of the unions. They want to be able to say to people in work "Do not go for higher pay, because that will threaten your jobs and the existence of your firm." The Government's obsession with strikes motivates the clause and the Government's economic policy.
The Government hold a whip over the working population by rapidly increasing unemployment. In addition, they are imposing extra vindictiveness against the unemployed. Supplementary benefits are already inadequate. The levels of benefit will become worse as, in the next few months and years, the Government are forced into a desperate search for further cuts and economies towards which the whole logic of their financial position pushes them. They will be under pressure to achieve the type of tax cuts forecast by the Financial Secretary on "Weekend World".
Taxes will be increased because of the mounting burden of unemployment and the Depression. The Government will be forced into another massive internal struggle for economies. Unemployment benefit, supplementary benefit and pensions will be considered as ripe for the cheeseparing economies that the Government will have to make.
Over the years the Tory Party has changed from the party of empire to one that rushes, in a servile and sycophantic fashion, towards Europe, to a party that insists, in its financial measures, that there are two nations and that the lower nation shall bear the burden. It was the party of Heathean technocracy that made such a mess, but it has now reneged and pulled back from that. After the abdication of all the strands of Conservative Party policy, what is left is the prejudice expressed tonight by the Financial Secretary in his juvenile little interventions. It is a prejudice against workers, trade unions, the unemployed and strikers. That prejudice is manifest in the measure and in the Financial Secretary's attitude.
The Tory Party is now held together by prejudices, which are being put into legislative form. They have festered in Tory associations and corner grocery shops over the years. Now the prejudices are crawling on to the statute book in little vindictive measures such as this.
The Government justify the measure by saying that income from all sources should be taxable. Why is not that social justice applied to tax evasion? The Financial Secretary told us about the economies in Inland Revenue staff. That staff could be employed in rooting out tax evasion, which is more expensive, on a bigger scale, and more harmful to the economy than strikes. Why is that same approach not being applied? Strikers are defending their standard of living against the Government's economic policies.
If the Government insist on taxing people who, according to the Financial Secretary, are acting voluntarily in a way that is harmful to the economy, why do they not tax people who export their capital on a massive scale? It would be interesting to hear the accurate figures of the amount of capital that flows out of Britain for portfolio investment, investment in villas, and other useless activities overseas, which should be invested here to


produce jobs. What harm is done by that outflow of capital? If the Government are interested in fiscal justice, why do they not deal with that?
The Prime Minister often says that she is concerned about the family. If that concern leads to such vindictiveness towards the families of strikers, what of that concern? How does the Prime Minister justify making a distinction between the families of strikers and the families in the rest of the community?
The measure increases the number of civil servants when the Government are committed to reducing that number. It is unnecessarily vindictive and complicated. The Committee should oppose this squalid little measure.

Mr. Campbell-Savours: I heard the hon. Member for Watford (Mr. Garel-Jones) ask, from a sedentary position, "Should we intervene?" It is significant that Government Back Benchers have not intervened in the debate. They have not sought to intervene, because they believe that the Government's decisions and recommendations cannot be sustained and defended on any public platform anywhere in the United Kingdom. The clauses penalise, because they are vindictive. Their objective is to undermine working men and women.
The clause affects strikers' families rather than strikers. We can trace that to the Government's election programme. We remember the campaign that was mounted by the Tory Party to generate hysteria about the position of strikers' families and the benefits paid to them. The Financial Secretary said that we were seeking special arrangements. We are doing so in many ways. We are seeking to establish that the dependants of strikers are fully protected in any legislation that comes before the House. That is not an ignoble suggestion, but an objective that should be shared by the majority in Britain. There is no understandable reason why the wives or other dependants of strikers should be penalised in any way by Government action. It is not true that strikers draw supplementary benefits, as has been implied by the Financial Secretary and by the Conservative Party. They draw benefit on behalf of their families and dependants.
7.30 pm
The debate is an extension of the industrial relations debates with which the Conservative Party preoccupies itself. We can evaluate the Conservatives' attitude on the basis of what little experience they have of industrial relations problems. It is a significant point that if one visits a picket line in any major industrial action and asks those picketing whether they have met their Conservative Members of Parliament, the answer is always "No." The comments of Conservative Members, reported in the local press, are marked by the derision with which they treat those who take action, even when they believe that they have a legitimate claim.
The root of this clause, and of other clauses in other Bills, is to be found in the fact that Conservatives have no instinctive understanding of industrial relations—why workers take industrial action, or why they need to do so to defend their interests. We can link this little measure to the Employment Act 1980, introduced soon after the general election. It had the effect of restricting trade union rights and the rights of those taking industrial action. The

obsessive support and promotion by the Conservative Parliamentary Party and the Government of postal balloting, sponsored by the State, is an extension—

Mr. Tristan Garel-Jones: Shame.

Mr. Campbell-Savours: It is strange how the truth hurts. A long list of measures introduced by the Government have the same effect, namely, to undermine the position of those taking industrial action, whether or not it is for legitimate reasons.
I am sure that my hon. Friends will be quick to endorse the AUEW decision last week to reject sponsored postal balloting and to conduct balloting only on the basis that it should financially support any arrangements that it wishes to make. In addition to this clause, there is the argument about the closed shop and the little measure that was passed some months ago to allow the Army, under certain conditions, to be used in a strike-breaking move. Such little measures may not appear to be part of the general package on industrial relations, but the clause is rooted in the Government's general policy, and it arises only when the Government cannot gain agreement with trade unions about industrial relations.
There is a distinct difference in the approach of the Government and that of the Labour Government. I do not claim that the social contract was successful in its latter days. That may have been due to a statistical error by the then Prime Minister, who imposed a 5 per cent. rather than a 10 per cent. pay limit. Many believe that if he had chosen 10 per cent. there would have been a Labour Government today. However, the principle underlying all the actions of the Labour Administration in their relationship with trade unions was to forge conditions of consent.
When the Government were elected, and following the interesting Ridley report, produced by the present Minister of State, Foreign and Commonwealth Office, who pinpointed areas of policy initiative as far back as 1978, they said that they would pursue a different approach from that of the Labour Government. The final means that they have used to subdue strikers and reduce industrial action has been their pursuance of monetarist strategy, thereby increasing the numbers who wait for jobs at the gates of places of work. The hon. Member for Watford (Mr. Garel-Jones) may smile, but that package of proposals was used on the doorstep during the last general election campaign to justify the return of a Conservative Government. Conservative canvassers used it to illustrate how a Conservative Government would deal with what they believed to be a major problem in industrial relations.
The next Labour Government will not pursue that approach. A number of measures will have to be repealed at an early stage if we are to reforge the links with the trade unions. Legislation on the statute book, or about to be placed on the statute book, undermines the possibility of future good relations.

Mr. Cook: The debate has served a useful function, even if the Opposition are defeated in the Division. If nothing else, we have had fascinating glimpses into the thinking of the Financial Secretary—

Mr. Jack Straw: Rare glimpses.

Mr. Cook: My hon. Friends are competing with me for words to describe it. I happily accept "rare", "disturbing" or other synonyms for the fascinating glimpses. It is well for the Financial Secretary that the Minister of State, who


has some experience in his profession of precision in fiscal policy and fiscal rationale, left the Chamber before the right hon. Gentleman spoke. The Minister might have experienced some unease at the rationale produced by the right hon. Gentleman for the fiscal decision. We were told that strikers should be singled out for taxation because striking was a voluntary action. That was an interesting illustration of the way in which the Financial Secretary regards the striker—as someone who does irresponsible damage to the economy purely of his own volition and free will.
Some who have spoken from the Dispatch Box in the past have claimed that retirement was voluntary and that it was not necessary to give up work. It is within my living memory, which is slightly shorter than that of the Financial Secretary, that some used to say that parenthood was voluntary and that those who made themselves single parents had done so of their own volition and free will. Should they also be subject to taxation? We were told by the Financial Secretary that the striker should be subject to taxation because strikes damage the economy. Retirement damages the economy. The economy would be healthier if people did not retire and did not cease to be economically active. Should they be subject to taxation?
Lastly, the right hon. Gentleman asserted that strikers should be singled out for this special measure because in striking they are taking action to improve their income. I thought that if nothing else the Government had adjured the population to take entrepreneurial action in a rough and ready market force jungle to improve their incomes. However, the right hon. Gentleman argues that strikers should be deemed to be a special group that should be subject to the scope of taxation. They are to be treated differently from other groups in receipt of supplementary benefit.
The right hon. Gentleman asked why the family with an unemployed head of household should be worse off than the family with a head of household who is on strike. The striker's family is already much worse off than the household that is suffering unemployment. Its income is reduced by the income that would normally be granted under the supplementary benefit rules to the head of the household. The rest of the family—the wife and the children—are worse off by the deduction of the £12, a measure that was introduced by the Government last year. Therefore, a striker's family is about £30 a week worse off than the family of the unemployed worker. It is bogus to suggest that we must import the concept of taxation to the taxable income and supplementary benefit of the striker to achieve equity between the striker and the unemployed worker. There is already gross inequity between them and that is at the expense of the striker's family.
We are in danger of repeating granny's footsteps. We began by taxing unemployment benefit. We moved inescapably to taxing supplementary benefit received by a family whose head of household is unemployed and who has not paid sufficient contributions to obtain unemployment benefit. Thus it follows logically that that household has to come within the ambit of the taxation of unemployment benefit. I do not think that that is desirable in principle. It is one of the reasons that should weigh with us when we decide to tax unemployment benefit. However, the decision having been taken, I accept that it is an inescapable corollary.
The argument is advanced by the Financial Secretary that there is a further inescapable corollary—that we must

tax the supplementary benefit received by the striker's household. If we are to follow that chain of reasoning, why should we stop there? Having taxed the supplementary benefit of the striker's household, should not we tax the supplementary benefit paid to other households? Why should the woman whose husband is on strike be worse off than the woman whose husband has deserted her? What fiscal rationale can be found for distinguishing between the two?

Mr. Austin Mitchell: Vindictiveness.

Mr. Cook: I ask my hon. Friend not to rush me. I am coming to that. If a logical break can be found in that chain of reasoning, it rests in limiting taxation to the taxation of the unemployed. We settled that for better or worse in the previous Division and that is where we should leave it.
My hon. Friend the Member for Grimsby (Mr. Mitchell) suggests that there is vindictiveness on the Government's part. Marxists have always argued that the history of mankind is the history of class conflict. I have never been entirely persuaded of that view of history. However, the longer that we live under this Government the more I can be persuaded that there may be some truth in that argument. I was persuaded of it when listening to the Financial Secretary. It is plain that the taxation of strikers has been inserted in the Bill as a vindictive action against strikers.
If the right hon. Gentleman is prepared rashly to endorse a view of history that is based on class conflict, I warn him that many people strike who are not necessarily Marxists. Many who are striking against the Government in the Civil Service voted for the Conservative Party at the general election. If he does not believe me, I ask him to talk to the pickets as I have. It is interesting to note that they are striking against their employer, the Government, who have unilaterally suspended their pay bargaining procedure.
If the right hon. Gentleman speaks to the pickets, he will find that none of them thinks that he is on strike voluntarily. He will conceive that he is on strike because his employer took unilateral action. It is therefore necessary for civil servants to take action to bring their employer back to the pay bargaining system. They regard it as necessary rather than voluntary. That is not a right that has been challenged by the Government. At no stage over the past two years have the Government had the courage to say that they regard the right to strike as something suspect, which should be suspended. We may hear that but we have not yet heard it.
Instead, we have had a series of attacks on the flank to weaken the ability to strike by hitting at the pockets not of the man on strike but of the housewife and the children. The Government do not have the courage openly to challenge the right to strike, but they intend to erode that right by making those who strike subject to a special form of taxation that will be different from that applied to any other household in receipt of supplementary benefit except the household which comes within the ambit of unemployment benefit. I do not think that the Committee can accept that proposition and challenge and it must divide on the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 212, Noes 275

Division No. 175]
[7.47 pm


AYES


Abse, Leo
Garrett, John (Norwich S)


Adams, Allen
George, Bruce


Allaun, Frank
Gilbert, Rt Hon Dr John


Anderson, Donald
Ginsburg, David


Archer, Rt Hon Peter
Graham, Ted


Ashley, Rt Hon Jack
Grant, George (Morpeth)


Ashton, Joe
Hamilton, James (Bothwell)


Atkinson, N.(H'gey,)
Hamilton, W. W. (C'tral Fife)


Bagier, Gordon A.T.
Harrison, Rt Hon Walter


Barnett, Guy (Greenwich)
Hart, Rt Hon Dame Judith


Barnett, Rt Hon Joel (H'wd)
Hattersley, Rt Hon Roy


Benn, Rt Hon A. Wedgwood
Haynes, Frank


Bennett, Andrew(St'kp't N)
Healey, Rt Hon Denis


Bidwell, Sydney
Heffer, Eric S.


Booth, Rt Hon Albert
Hogg, N. (E Dunb't'nshire)


Boothroyd, Miss Betty
Holland, S. (L'b'th, Vauxh'll)


Bray, Dr Jeremy
Homewood, William


Brown, R. C. (N'castle W)
Hooley, Frank


Brown, Ron (E'burgh, Leith)
Howell, Rt Hon D.


Buchan, Norman
Hudson Davies, Gwilym E.


Callaghan, Jim (Midd't'n &amp; P)
Hughes, Mark (Durham)


Campbell, Ian
Hughes, Robert (Aberdeen N)


Campbell-Savours, Dale
Hughes, Roy (Newport)


Canavan, Dennis
Janner, Hon Greville


Cant, R. B.
Jay, Rt Hon Douglas


Carmichael, Neil
John, Brynmor


Carter-Jones, Lewis
Johnson, James (Hull West)


Clark, Dr David (S Shields)
Jones, Rt Hon Alec (Rh'dda)


Cocks, Rt Hon M. (B'stol S)
Jones, Barry (East Flint)


Coleman, Donald
Jones, Dan (Burnley)


Concannon, Rt Hon J. D.
Kaufman, Rt Hon Gerald


Conlan, Bernard
Kerr, Russell


Cook, Robin F.
Kilroy-Silk, Robert


Cowans, Harry
Kinnock, Neil


Craigen, J. M.
Lambie, David


Crowther, J. S.
Lamborn, Harry


Cryer, Bob
Leadbitter, Ted


Cunliffe, Lawrence
Leighton, Ronald


Cunningham, G. (lslington S)
Lestor, Miss Joan


Cunningham, Dr J. (W'h'n)
Lewis, Arthur (N'ham NW)


Dalyell, Tam
Litherland, Robert


Davidson, Arthur
Lyon, Alexander (York)


Davies, Rt Hon Denzil (L'lli)
Mabon, Rt Hon Dr J. Dickson


Davies, Ifor (Gower)
McElhone, Frank


Davis, Clinton (Hackney C)
McKelvey, William


Davis, T. (B'ham, Stechf'd)
MacKenzie, Rt Hon Gregor


Dean, Joseph (Leeds West)
McMahon, Andrew


Dempsey, James
McNally, Thomas


Dewar, Donald
McNamara, Kevin


Dixon, Donald
McWilliam, John


Dobson, Frank
Magee, Bryan


Dormand, Jack
Marks, Kenneth


Douglas-Mann, Bruce
Marshall, D(G'gow S'ton)


Dubs, Alfred
Marshall, Dr Edmund (Goole)


Duffy, A. E. P.
Marshall, Jim (Leicester S)


Dunn, James A.
Martin, M(G'gow S'burn)


Dunnett, Jack
Mason, Rt Hon Roy


Dunwoody, Hon Mrs G.
Maxton, John


Eadie, Alex
Maynard, Miss Joan


Eastham, Ken
Mellish, Rt Hon Robert


Ellis, R. (NE D'bysh're)
Mikardo, lan


English, Michael
Millan, Rt Hon Bruce


Ennals, Rt Hon David
Mitchell, Austin (Grimsby)


Evans, loan (Aberdare)
Mitchell, R. C. (Soton Itchen)


Evans, John (Newton)
Morris. Rt Hon A. (W'shawe)


Ewing, Harry
Morris, Rt Hon C. (O'shaw)


Field, Frank
Morris, Rt Hon J. (Aberavon)


Fitch, Alan
Morton, George


Fitt, Gerard
Oakes, Rt Hon Gordon


Flannery, Martin
Ogden, Eric


Fletcher, Ted (Darlington)
O'Halloran, Michael


Foot, Rt Hon Michael
O'Neill, Martin


Ford, Ben
Orme, Rt Hon Stanley


Forrester, John
Palmer, Arthur


Foster, Derek
Parry, Robert


Fraser, J. (Lamb'th, N'w'd)
Prescott, John


Freeson, Rt Hon Reginald
Price, C. (Lewisham W)





Race, Reg
Summerskill, Hon Dr Shirley


Radice, Giles
Thomas, Dafydd (Merioneth)


Rees, Rt Hon M (Leeds S)
Thomas, Jeffrey (Abertillery)


Richardson, Jo
Thomas, Dr R. (Carmarthen)


Roberts, Albert (Normanton)
Thorne, Stan (Preston South)


Roberts, Allan (Bootle)
Tilley, John


Roberts, Ernest (Hackney N)
Tinn, James


Roberts, Gwilym (Cannock)
Torney, Tom


Robertson, George
Wainwright, E.(Dearne V)


Robinson, G. (Coventry NW)
Walker, Rt Hon H.(D'caster)


Ross, Ernest (Dundee West)
Watkins, David


Rowlands, Ted
Weetch, Ken


Ryman, John
Wellbeloved, James


Sever, John
Welsh, Michael


Sheerman, Barry
White, Frank R.


Sheldon, Rt Hon R.
White, J. (G'gow Pollok)


Shore, Rt Hon Peter
Whitlock, William


Short, Mrs Renée
Wigley, Dafydd


Silkin, Rt Hon J. (Deptford)
Willey, Rt Hon Frederick


Silkin, Rt Hon S. C. (Dulwich)
Williams, Rt Hon A.(S'sea W)


Skinner, Dennis
Wilson, Rt Hon Sir H.(H'ton)


Smith, Rt Hon J. (N Lanark)
Wilson, William (C'try SE)


Snape, Peter
Winnick, David


Soley, Clive
Woodall, Alec


Spearing, Nigel
Woolmer, Kenneth


Spriggs, Leslie
Wright, Sheila


Stallard, A. W.
Young, David (Bolton E)


Stewart, Rt Hon D. (W Isles)



Stoddart, David
Tellers for the Ayes:


Stott, Roger
Mr. Hugh McCartney and Mr. Allen McKay.


Straw, Jack





NOES


Adley, Robert
Clark, Hon A. (Plym'th, S'n)


Aitken, Jonathan
Clark, Sir W. (Croydon S)


Alexander, Richard
Clarke, Kenneth (Rushcliffe)


Alison, Michael
Clegg, Sir Walter


Amery, Rt Hon Julian
Cockeram, Eric


Ancram, Michael
Colvin, Michael


Aspinwall, Jack
Cope, John


Atkins, Robert(Preston N)
Corrie, John


Baker, Kenneth(St.M'bone,)
Cranborne, Viscount


Baker, Nicholas (N Dorset)
Critchley, Julian


Banks, Robert
Crouch, David


Bell, Sir Ronald
Dean, Paul (North Somerset)


Bendall, Vivian
Dickens, Geoffrey


Benyon, Thomas (A'don)
Dorrell, Stephen


Benyon, W. (Buckingham)
Douglas-Hamilton, Lord J.


Berry, Hon Anthony
Dover, Denshore


Best, Keith
du Cann, Rt Hon Edward


Bevan, David Gilroy
Dunn, Robert (Dartford)


Biggs-Davison, John
Dykes, Hugh


Blackburn, John
Eden, Rt Hon Sir John


Blaker, Peter
Edwards, Rt Hon N. (P'broke)


Body, Richard
Eggar, Tim


Bonsor, Sir Nicholas
Elliott, Sir William


Bowden, Andrew
Emery, Peter


Boyson, Dr Rhodes
Eyre, Reginald


Braine, Sir Bernard
Fairgrieve, Russell


Bright, Graham
Faith, Mrs Sheila


Brinton, Tim
Fell, Anthony


Brittan, Leon
Fenner, Mrs Peggy


Brooke, Hon Peter
Fisher, Sir Nigel


Brotherton, Michael
Fletcher, A. (Ed'nb'gh N)


Brown, Michael(Brigg &amp; Sc'n)
Fookes, Miss Janet


Browne, John (Winchester)
Forman, Nigel


Bruce-Gardyne, John
Fowler, Rt Hon Norman


Bryan, Sir Paul
Fox, Marcus


Buchanan-Smith, Alick
Fraser, Rt Hon Sir Hugh


Buck, Antony
Fraser, Peter (South Angus)


Budgen, Nick
Fry, Peter


Bulmer, Esmond
Gardiner, George (Reigate)


Burden, Sir Frederick
Gardner, Edward (S Fylde)


Butcher, John
Garel-Jones, Tristan


Cadbury, Jocelyn
Gilmour, Rt Hon Sir Ian


Carlisle, John (Luton West)
Glyn, Dr Alan


Carlisle, Kenneth (Lincoln)
Gow, Ian


Carlisle, Rt Hon M. (R'c'n)
Gower, Sir Raymond


Chalker, Mrs. Lynda
Gray, Hamish


Churchill, W. S.
Greenway, Harry






Griffiths, E.(B'y St. Edm'ds)
Murphy, Christopher


Griffiths, Peter (Portsm'th N)
Myles, David


Grist, Ian
Neale, Gerrard


Grylls, Michael
Needham, Richard


Hamilton, Hon A.
Nelson, Anthony


Hamilton, Michael (Salisbury)
Neubert, Michael


Hampson, Dr Keith
Newton, Tony


Hannam, John
Normanton, Tom


Haselhurst, Alan
Onslow, Cranley


Hastings, Stephen
Page, Rt Hon Sir G. (Crosby)


Havers, Rt Hon Sir Michael
Page, Richard (SW Herts)


Hawksley, Warren
Parkinson, Cecil


Hayhoe, Barney
Parris, Matthew


Heddle, John
Patten, Christopher (Bath)


Henderson, Barry
Patten, John (Oxford)


Heseltine, Rt Hon Michael
Pattie, Geoffrey


Hicks, Robert
Percival, Sir Ian


Higgins, Rt Hon Terence L.
Peyton, Rt Hon John


Holland, Philip (Carlton)
Pink, R. Bonner


Hooson, Tom
Porter, Barry


Hordern, Peter
Powell, Rt Hon J.E. (S Down)


Howell, Rt Hon D. (G'ldf'd)
Prentice, Rt Hon Reg


Hunt, David (Wirral)
Price, Sir David (Eastleigh)


Hunt, John (Ravensbourne)
Proctor, K. Harvey


Hurd, Hon Douglas
Pym, Rt Hon Francis


Jenkin, Rt Hon Patrick
Raison, Timothy


Johnson Smith, Geoffrey
Rathbone, Tim


Jopling, Rt Hon Michael
Rees, Peter (Dover and Deal)


Kaberry, Sir Donald
Rees-Davies, W. R.


Kellett-Bowman, Mrs Elaine
Renton, Tim


Kimball, Marcus
Rhodes James, Robert


Kitson, Sir Timothy
Ridley, Hon Nicholas


Knox, David
Ridsdale, Sir Julian


Lamont, Norman
Rifkind, Malcolm


Lang, Ian
Rippon, Rt Hon Geoffrey


Langford-Holt, Sir John
Roberts, M. (Cardiff NW)


Latham, Michael
Roberts, Wyn (Conway)


Lawrence, Ivan
Rossi, Hugh


Lawson, Rt Hon Nigel
Rost, Peter


Lee, John
Royle, Sir Anthony


Le Merchant, Spencer
Sainsbury, Hon Timothy


Lennox-Boyd, Hon Mark
Scott, Nicholas


Lloyd, Ian (Havant &amp; W'loo)
Shaw, Michael (Scarborough)


Lloyd, Peter (Fareham)
Shelton, William (Streatham)


Loveridge, John
Shepherd, Colin (Hereford)


Luce, Richard
Shepherd, Richard


Lyell, Nicholas
Shersby, Michael


McCrindle, Robert
Silvester, Fred


Macfarlane, Neil
Sims, Roger


MacGregor, John
Skeet, T. H. H.


MacKay, John (Argyll)
Speed, Keith


Macmillan, Rt Hon M.
Speller, Tony


McNair-Wilson, M. (N'bury)
Spicer, Jim (West Dorset)


McNair-Wilson, P. (New F'st)
Spicer, Michael (S Worcs)


McQuarrie, Albert
Sproat, lain


Madel, David
Squire, Robin


Major, John
Stanbrook, Ivor


Marland, Paul
Stanley, John


Marlow, Tony
Steen, Anthony


Marshall, Michael (Arundel)
Stevens, Martin


Mather, Carol
Stewart, Ian (Hitchin)


Maude, Rt Hon Sir Angus
Stewart, A.(E Renfrewshire)


Mawby, Ray
Stokes, John


Mawhinney, Dr Brian
Stradling Thomas, J.


Maxwell-Hyslop, Robin
Tapsell, Peter


Mayhew, Patrick
Taylor, Robert (Croydon NW)


Mellor, David
Taylor, Teddy (S'end E)


Meyer, Sir Anthony
Tebbit, Norman


Miller, Hal (B'grove)
Temple-Morris, Peter


Mills, lain (Meriden)
Thomas, Rt Hon Peter


Miscampbell, Norman
Thompson, Donald


Moate, Roger
Thorne, Neil (llford South)


Molyneaux, James
Thornton, Malcolm


Monro, Hector
Townend, John (Bridlington)


Montgomery, Fergus
Trippier, David


Moore, John
Trotter, Neville


Morris, M. (N'hampton S)
van Straubenzee, W. R.


Morrison, Hon C. (Devizes)
Vaughan, Dr Gerard


Morrison, Hon P. (Chester)
Viggers, Peter


Mudd, David
Waddington, David





Wakeham, John
Whitelaw, Rt Hon William


Waldegrave, Hon William
Whitney, Raymond


Walker, B. (Perth)
Wickenden, Keith


Walker-Smith, Rt Hon Sir D.
Williams, D.(Montgomery)


Wall, Patrick
Winterton, Nicholas


Waller, Gary
Wolfson, Mark


Walters, Dennis
Young, Sir George (Acton)


Ward, John
Younger, Rt Hon George


Warren, Kenneth



Watson, John
Tellers for the Noes:


Wells, John (Maidstone)
Mr. Robert Boscawen and Mr. Alastair Goodlad.


Wells, Bowen



Wheeler, John

Question accordingly negatived.

Clause 27 ordered to stand part of the Bill.

Clause 29

PAY AS YOU EARN REPAYMENTS

Mr. Robert Sheldon: I beg to move amendment No. 25, in page 18, line 35, leave out paragraph (a).

The Chairman (Mr. Bernard Weatherill): With this it will be convenient to take the following amendments:
No. 26, in page 18, line 35, leave out 'unemployment benefit or'.
No. 27, in page 18, line 35, leave out from benefit' to 'in' in line 38.
No. 28, in page 18, line 38, after '1977', insert
'which is taxable by virtue of section 27 above'.

Mr. Sheldon: Subsection (a) makes provision for tax benefits to be withheld from the unemployed and from people on strike. The unemployment benefit office will be able to set off tax liability against the refund of the tax. Any refund due will be paid only on return to work. The Government see that as an incentive to encourage the unemployed to find work quickly. They have incentives for all sorts of things, none of which seem to work, because they fail to understand what motivates the British people. They will be disappointed yet again if they believe that this measure will get people back to work. The striker will not receive any benefit. and he will only get the tax refund when he returns to work.
We heard earlier that the Civil Service will be increased by 3,500, yet the Government set great, if not excessive, store by reducing the Civil Service. The Inland Revenue is the major Department involved in this measure. On I April 1979 it had 84,000 civil servants. The number dropped to 79,000 on 1 January 1980, and on 1 January' 1981 the figure was 76,200. Even with their enormous impetus to reduce bureaucracy, the Government appear able to contemplate with equanimity an additional 3,500 civil servants.
We must also bear in mind the enormous increase in the number of unemployed. In April 1979 the figure was 1,340,000. It had increased to 1,470,000 by January 1980, and is now about 2½ million.
The Government have made the reduction of the Civil Service into almost a political philosophy in a way unprecedented in this century. Civil servants are aware that the Government do not like them and perhaps even dislike them. The Government preach the virtues of good management, so it does not make sense to have that relationship with those with whom they come into daily contact. The Government have offset their dislike for the Civil Service and their desire to reduce it against their


dislike for the unemployed and those on strike, and they are prepared to accept the enormous increase in the Civil Service.
Not only are many of the measures in the Bill unfair, but they come at a most inopportune time. People are under great pressure. Fear of unemployment is spreading. In addition, it tends to affect certain parts of the country more than others. In the 1960s unemployment was only 200,000. In the 1970s it was about ½ million, rising to about 1 million in the latter half of that period. It is now about 2½ million and approaching 3 million. People are not out of work because they are workshy. It is inopportune to suggest that this legislation will encourage people to work. The Government's economic policy is failing, so they are naturally blaming others, and the ideal candidates are strikers and the unemployed. The Government's monetary policies have reduced our manufacturing output and prosperity. In January 1980, industrial output was 111·6 per cent. By January 1981 it had declined to 98·3 per cent. Srikes have had only a trivial effect on that staggering drop.

Mr. Anthony Fell: I must have misunderstood the right hon. Gentleman. I thought that he gave the highest figure of unemployment during the Labour Government as 1 million.

Mr. Sheldon: The hon. Gentleman misunderstood me. I was giving rough figures for the latter part of the 1970s. I said that unemployment was 1 million. In 1979 it was 1,300,000. I shall be happy to be more precise if the hon. Gentleman wishes.
The Financial Secretary mentioned the Departments in which the additional civil servants would be employed—the Department of Health and Social Security, and the Department of Employment, but mainly the Inland Revenue.
The provision for taxing benefits reminds one of the time, when public expenditure cuts reached the end of the line in the 1930s. Governments first cut capital projects until hardly any are left. They then turn to transfer payments. Taxing unemployment benefits is an easy option. It will not end there. The search for scapegoats went on in the 1930s. Transfer payments were taxed and unemployment benefit was cut. We shall see the same again. The Chief Secretary will apply the same pressure to transfer payments from the DHSS as his forerunners did 50 years ago.

Mr. Ioan Evans: In their first Budget, the Government introduced massive concessions for the wealthy. The taxation of unemployment benefit is the other side of the coin. Is not that scandalous?

Mr. Sheldon: I am grateful to my hon. Friend for that observation. I shall be dealing with the wholly unjustifiable way in which taxation is being biased, which will cause a great outcry once it is fully understood.

Mrs. Elaine Kellett-Bowman: The right hon. Gentleman, like myself, was a member of the Select Committee which dealt with tax credits. That Committee very largely agreed that all income should be taxed, irrespective of source. There was no division between the parties on that. Does not he therefore agree that it was a pity that the Labour Government did not introduce this, as it would have been totally fair all round?

Mr. Sheldon: It is a great pity that the hon. Lady was not present earlier, as that was dealt with on clause 27. Had she been here, she would know that every hon. Member who spoke agreed on that. There was no division whatever. I shall not go into the details, as I am sure that I should incur your displeasure, Mr. Weatherill. That was disposed of as a matter which did not divide the Committee. What we are arguing about is the means.
In the incentives which, according to the Government, are being provided for jobs, we are seeing something not all that different from what happened in the 1930s, when there was also great talk about scroungers. Anyone who went through the 1979 election will recall strongly the antipathy felt by a large part of the electorate towards scroungers on social welfare and unemployment pay. The same happened in 1930. People were looking for scapegoats. The unemployed were held to be capable of employment if only they would seek it. Eventually, the war came along, unemployment dropped dramatically from millions to about 100,000 and there were no further arguments about scroungers. We are now having to relearn that lesson, which should not need to be relearned. The people of this country are still anxious to work. Anyone who doubts that has only to talk to people in the employment offices and the jobcentres.
In an earlier debate, the hon. Member for Gateshead, West (Mr. Horam) put forward an argument that is relevant to this debate. He asked whether this was a serious way of widening the tax base or whether it was just at the lower end. I do not believe that it has anything to do with that. One does not employ 3,500 civil servants just to widen the tax base. There must be a greater reason than that. If one compares the amount of money that will be gained with the cost of the civil servants, the cost of collection is one that the Inland Revenue would normally boggle at and not consider to be a reasonable proportion to spend on collecting that amount of revenue—unless there were wider considerations in mind.
As we well know, the considerations are those of getting people working again and making sure that they do not idle away their time. We are all aware of the fear of unemployment, but those of us from the North and from the other regions know perhaps rather more strongly, how it is felt in our constituencies. With the recent local elections, we were perhaps rather more prominent in our constituencies than at other times. One has only to witness the strength of feeling on the subject to appreciate how deeply these matters concern the working people of this country.
I was told last week when we debated a number of tax measures which would normally concern my constituents and others as matters of particular importance that they were held not to have the same degree of importance as on previous occasions. I was told again and again that the major issue that affects all the people of my constituency is the fear of unemployment. It frightens every one of them. As factory after factory closes—and for every closure, there are half a dozen rumours—people in my constituency become more and more frightened at the rising level of unemployment.
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At the time of greatest fear, what do the Government do? They say that those whose fears are realised will be denied their own tax refunds, so that when the blow finally strikes, their own money will be sequestered and they will


not be allowed to have it until they get back to work, if and when work becomes available. Only then will they have the chance to make up the deficit which the Government will make sure that they must accept.
It is not only that which concerns me. Another worry, to which I must return although I mentioned it earlier, is the increasingly widespread feeling that the tax system that we regarded as an open and fair system, which we could admire, run by civil servants whom we sometimes mocked but whom we fundamentally respected for their integrity and independence, will now involve privileged taxpayers due to the distortion of the system in which the clause plays its part.
Taxpayers on schedule D, for example, will pay tax many months later. They will be able to claim a wide range of expenses that those on schedule E cannot even consider. They or their accountants will be able to conduct a dialogue with the tax inspector. A whole range of avoidance devices, some less acceptable than others, will be available and any accountant will use at least some of them. Let us compare that position with the situation of those on schedule E, whom we are considering here. The schedule E taxpayer hands over the money before receiving it. He can claim no expenses. The computation of his tax is reduced to a piece of simple arithmetic, and even that is to be withheld from him when he is unemployed. If clause 28 is accepted—and we shall strongly oppose it—the schedule E taxpayer who does not understand or who makes a mistake will find that the mistake cannot be rectified in any way.
As my hon. Friend the Member for Edinburgh, Central (Mr. Cook) pointed out, all this would almost create a class system in this country even if one did not exist already. The Government are distorting our tax system and debasing the traditional standards of the Civil Service to ensure that their crude and even cruel method of taxation of benefits is produced at a cost of 3,500 civil servants. That is no way to change the tax system and we shall continue to oppose it.

Mr. Richard Wainwright: At the expense of a great deal of ingenuity on the part of the Inland Revenue and an enormous burden upon employers, this country, almost alone in the world, maintains a system of pay-as-you-earn income tax so exquisitely devised, although so very difficult to operate, that from one pay day to another the average taxpayer is, as it were, up to date proportionately in his tax position. It is a remarkable system. Many people query whether it is any longer justifiable, but it has been one of the conspicuous features of British administration hitherto and it still stands.
The Government now take it upon themselves to take power to produce regulations partially to abort that system. For the first time, so far as I am aware, the principle embodied in the taxes Acts that when the tax tables show that a refund is due it must be paid on the next pay day is to be aborted in respect of unemployment benefits. The meanness is that this will all be done through the employer. The Government will use employers to withhold refunds which, during all the years that PAYE has existed, have otherwise been made promptly to the employee.
If the Chief Secretary can assure me that the regulations will somehow remove that distasteful burden from the employer, I shall be prepared to think again about this matter. However, the Bill contains no saving clause to

show that the employer will be protected. It is invidious in the extreme to ask employers to shoulder the burden of operating such a distasteful mechanism.
There is no saving clause to ensure that the regulations will operate only where there is good prima facie evidence that the amount of PAYE refund due is at least roughly equivalent to the tax that will eventually become due on the benefits which the unemployed person has received. If there were a saving clause to ensure that as closely as possible the regulations would provide that the refund would be withheld only in so far as it roughly balanced the estimated tax due on the unemployment benefit up to the end of a certain period, I would again be prepared to have second thoughts. But the Bill contains no such saving clause.
It will be apparent to all hon. Members that the PAYE refund due to a taxpayer who becomes unemployed may, for all kinds of reasons, be much larger than any liability on his unemployment benefit. For example, as is well known, the PAYE system takes account in one year of failures to assess tax in previous years, be it under-assessment or over-assessment. That can be brought forward into the current tax year and can be the subject of refunds.
Such refunds can be extremely large. If a major error in a previous year is discovered, an employee can receive a large refund, far larger than his liability on unemployment benefit. However, there is nothing in the clause to ensure that the regulations will take care of what will otherwise be a gross inequity.
There is also the question of error. We have already been told of the statement by the Chairman of the Inland Revenue that one in 10 PAYE codes are in error. That is a frequent source of substantial PAYE refunds. I cannot for the life of me see any possible justification for withholding a refund arising from a major error simply because the Government cannot think of any method within the PAYE system of taxing unemployment benefit.
It would be a major departure of principle to withhold refunds which in equity belong to the taxpayer simply because the Government cannot apply their own laws to their own disbursements. We should not give the Government power to issue these regulations in the absence of saving clauses in the Bill which state the parameters of these regulations. The Government would be wise to pause and consider whether it will not help to destroy public confidence in the PAYE system by insisting that employers must withhold what may be large sums from their employees for reasons that have absolutely nothing to do with the liability to tax on unemployment benefit.

Mr. John Maxton: When Labour Members complain about the Conservative Party making a distinction between the so-called scroungers on social security benefit and those who evade taxation, I have often heard Conservative Members say "Ah well, it is different". The difference seems to be that when someone receives unemployment, social security or sickness benefit he is receiving money from the State, whereas when someone pays tax it is his money and essentially he is trying to keep more of it.
But there is now a total inconsistency in that argument. Now, when someone who is unemployed or on strike is entitled to a return on his own money, he will not receive it until such time as he returns to work. In other words,


he will no longer get what he is morally entitled to. As is typical of the Government, the only consistency is that they are hitting the poorest and making sure that their wealthy, fatted calf friends are all right. That has been the consistent theme running through the Government's economic policy, particularly their fiscal policy.
We must look at these clauses in the context of total legislation in terms of social security, unemployment and other welfare benefits. They cannot be considered in isolation. We must look at them in the context of the person who becomes unemployed, and we must also remember that the unemployment benefit increase last year suffered a 5 per cent. abatement.
I am glad to see my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) on the Opposition Front Bench, because this is very much an area with which he is concerned. We must bear in mind the fact that the DHSS has introduced new regulations to ensure that those on social security are subject to a regime. Certainly, people in my constituency have been subjected to threats about the possibility of defrauding the DHSS. If there is the slightest suspicion, they are told "You really ought to come off benefit", which ensures that payments are kept to a minimum.
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Of the unemployed, 99 per cent. find themselves in that position through no fault of their own, and they are desperate to find work. The hard drive against the unemployed is morally indefensible. In addition, it is based on an out-of-date myth that, somehow or other, jobs are available. It is based on the myth that people strike willy-nilly and that if pressure is applied they will not do so. It is thought that people will somehow find jobs when there are no jobs to be found.
The Government will not give the unemployed their money. Next year they will cut out earnings-related unemployment benefit. Such actions contradict something that the Prime Minister said recently, namely, that if the unemployed cannot find jobs in South Wales they should move to find them. If tax rebates are not given back immediately, and if earnings-related benefits are not given, the unemployed will find it even more difficult to look for work elsewhere. If the Government take such action they will in effect be telling people to look for jobs in their own areas. The unemployed will find it more difficult to move elsewhere if they do not have the capital to survive a period of initial unemployment.

Mr. Campbell-Savours: That is important.

Mr. Maxton: Of course it is an important point; I made it. In the changing world in which we live, modern technology will pose an increasing problem. The Government have not faced the fact that some unemployment is due to technological change. Unemployment can be dealt with only if the unemployed have money—through tax rebates, earnings-related benefits and redundancy payments—when they first lose their jobs. Such money would give them opportunities not only in the areas in which they live but throughout the country. The unemployed would then be able to move easily and retrain in a new skill.
When we win the next election the economy will start to move again. However, people will still have to move

from one job to another. They will have to be trained and retrained between one employment and another. If that is to be done satisfactorily, people will need more money in the initial months of unemployment.
To leave the repayment of tax until a person goes back to work—which may be a long time—is indefensible. I had thought that one of the Government's aims was to create a mobile work force. They told us that that was why they wanted to introduce the sale of council houses. This legislation will make it more difficult for people to look for work elsewhere. Most of my constituents find it desperately difficult to find a job anywhere. This legislation will make it even more difficult for them.

Mr. Austin Mitchell: It is clear from their approach to economics and to the Bill that the Government are a body of men and women who are mad on incentives. Perhaps I should have paused between "mad" and "on incentives". They are keen on incentives, but make distinctions among the incentives that they apply. For the working class, the trade unionists and the less well off, the incentive is the whip. For them, the main incentive is a rise in unemployment. That is their incentive to stay at work and not to ask for wage increases. For the well-off, there is another incentive. The Government think that they belong to a different section of society, which needs the carrot of tax cuts and direct benefits. It is also clear that that incentive forms part of their argument in favour of the clause. The clause is an incentive to stay at work. If a person does not stay at work, his tax repayments will be delayed, regardless of whether he is out of work through his own fault. The clause represents an incentive to stay at work. I am convinced that the Government will abandon this incentive craze only when the sole incentive for Governments looms on the horizon—the threat of an election. Some Back Benchers have already seen that threat; perhaps that is why, shamefaced, they are not here. That incentive will soon be felt among the ranks of the Tory Party.
There will be a massive and gathering protest against what is being done. There are aspects now of an economic version of Jonestown. The prophet having led the chosen people into this disastrous mess, those people are beginning to realise that the prophet is asking for ritual suicide. That realisation will spread. Tory Back Benchers, at the end of this economic folly, will wonder why, in their unemployment, which will result from the election defeat of the Tory Government, they are not getting the massive tax rebates to which most of them would be entitled through not having not only their parliamentary but their outside salaries to help them through the unemployment that the Prime Minister will force upon them.
The incentive argument, when applied to the unemployed, is an insult to a section of society which should be helped and protected. There is no other explanation for the continued rise in unemployment than deliberate Government policy. It cannot be frictional or transitional unemployment. It cannot be unemployment generated by new technology, because we do not have the investment to produce the new technology. It cannot be unemployment generated by productivity. It is not even generated by the world recession. Why should the impact of the world recession be harder, deeper and steeper in our economy, which should be insulated by oil revenues? The only explanation is that it has been deliberately engineered to bring wage settlements down and the unions to heel.
The Government are now adding insult to this injury. [Interruption.] I do not know whether the hon. Member for Yarmouth (Mr. Fell) wishes to intervene to discuss the causes of unemployment. There is no other logical explanation for the rapid rise in unemployment—more than one million in two years—than deliberate Government policy. For the unemployed to be treated in this way is to add insult to injury. When this tax rebate is most necessary—they have a right to it; it is their money—it is being withheld from them. It is dangled before them like a carrot until the end of the tax year or their unemployment, whichever comes first. I repeat, when they need this money—their money—to help them plan their finances for the undoubtedly difficult period ahead, it is being withheld from them by the Government.

Mr. Maxton: Does my hon. Friend accept that this may cost the Government more money? Many honest, hard-working people, when declared redundant, are anxious to stay off social security because they dislike the idea of receiving social security. Many use the tax benefits to keep off unemployment and social security benefits for even longer.

Mr. Mitchell: My hon. Friend is right. Such people will obviously qualify for social security. That need will be forced on them by the Government, despite the Government's allegations of their being scroungers and layabouts. This tax rebate, which is their right and which will help to cushion them against the consequences of unemployment, is being snatched away from them by the Government for no easily understood reason. What kind of Government can do this to the unemployed, whose numbers are increasing rapidly and will continue to increase remorselessly throughout this year and next year because there is no alternative to increasing unemployment?
The Government set out a vision of improving society in some way, but they are throwing into reverse all the gains of the post-war period. All the better understanding of social structures, all the improvements that have been made in the post-war period, have been thrown into reverse because of sheer malevolence against the unemployed—and strikers. The Prime Minister is recreating the society, with the benefits that we have built up, so hard won since the war, and rebuilding it in her own image—divisive, vindictive, embittered. At the end of it all, it is tarted up with incentives, peroxided with the kind of incentives to the well-off that have been the main motive force behind the Government's economic policy over the last two years.
Thanks to measures such as this, Britain is becoming steadily a nastier, more unpleasant, more divisive and more hate-filled place, as a direct consequence of the present Government's policy. As despair and unemployment grow, that situation will get far worse, because the Government must now look around for someone to blame for their own failures—for the failure of these incentives to produce the promised economic results, for the failures of monetarist economic policy to produce the growth, and for the failure of night to follow day in the way in which the Chief Secretary promised it would. We are in a victim-of-the-month society where the Prime Minister and the Government look round for fresh victims to blame for their own failures.
That might suit the temperaments and prejudices of the Conservative Party. However, from the point of view of

the unemployed, who are being treated to shabby measures such as this, it is nothing but vindictiveness. The unemployed, rising in number, are now to be not only belaboured with accusations but robbed of the pittance of tax repayments which is their right.
Unemployment is an enormous personal tragedy to anyone hit by it. It deprives people of almost the nexus of their existence, because a job is so important. The contacts, workmates and friends that come with a job are very important. It is not only the money but the whole social structure of a job. It is the whole structure of a being that is provided by a job. People are deprived of their mainspring by unemployment. As they see it, they are deprived of the esteem of their fellow men and certainly of contact with workmates, and they are humiliated by unemployment. Now, this patriotic, glorious Goverment are to add to that the additional humiliation of withholding these tax payments.
Professor Patrick Minford has talked of an economic policy of rational expectations. The only rational expectation that one can have of the consequences of the present Government's economic policy is a continuous rise in unemployment. Just when that is happening and is certain to continue, is that the moment for treating the unemployed in this shabby fashion? This is just when. the Government should be declaring their sympathy—not using those glycerine tears of sympathy for the unemployed that the Prime Minister and so many other Ministers have thought necessary to put in their eyes. They should be increasing the long-term benefits and helping the unemployed by doing something for them. What are the Government now doing in their shabby way? They are taking back from the unemployed a tax repayment which should be theirs and is theirs as of right.
As the hon. Member for Colne Valley (Mr. Wainwright) said, this is not only breaching a basic principle of the tax system—prompt and immediate repayment. It is breaching the principle that the money is, after all, theirs. Just when the Government should be speeding up these tax repayments, they are withholding them. They are doing all this to appease a clamour in their ranks which they themselves have helped to generate—a clamour against the unemployed and against strikers and a clamour for victims.
That is why the House should reject this measure. In a sense, that is why it is sad to see someone quite extraordinarily able, in the form of the Chief Secretary, facing the humiliating job of defending this tawdry little measure. However, as he replies, it will be useful to the House if he comments on some specific points.

Mr. Bob Cryer: My hon. Friend has been very generous to the Chief Secretary, but, does he accept that if the Chief Secretary does not like doing the job, he does not have to do it? If the Chief Secretary finds crushing the unemployed so distasteful, he could retrieve some tangled shreds of what is left of his honour, resign and stand up for the unemployed.

Mr. Mitchell: My hon. Friend is correct. Those identified with the policy have a choice. If they do not take the obvious choice, clearly they approve wholeheartedly of the policy and all its consequences. It is sad to see the Chief Secretary rushing in to embrace the consequences of the folly, admittedly of others, but which he had the chance to distance himself from on taking over his office.
I understand that tax rebates will be withheld until the end of unemployment or the end of the tax year. Does it have to be that long, in the sense that someone becoming unemployed at this time of the year—if the unemployment is prolonged—may have a long wait for tax repayment? Is it not possible to devise an interim repayment system after a shorter time for those extreme cases who would be hit hard by prolonged unemployment? Why is a distinction made in the clause between the unemployed, who receive a tax rebate at the end of a tax year or a period of unemployment, and those involved in trade disputes, from whom a tax rebate is withheld until the end of the dispute even if the tax year ends before that? Why is there that distinction and why such a long period?
What is the main reason for this particularly nasty measure? Why should tax rebates be withheld during unemployment? Is it because it will be administratively too difficult to pay rebates during unemployment, once benefit is treated as taxable income? Or is it an attempt to reduce the living standards of the unemployed? Those are the alternatives. It is up to the Government to avow what they are doing -with this unpleasant measure.

Mr. John Horam: I find the Government's attitude in this subsection hard to understand. The amendment refers only to the unemployed. We are not talking about the separate issue of those engaged in industrial dispute. As the hon. Member for Grimsby (Mr. Mitchell) said, we are concerned about the involuntarily unemployed and the problems that they face.
A number of Opposition Members have said that people are morally entitled to the tax repayments that they should receive in normal circumstances when they become unemployed. Since the war, as the hon. Member for Colne Valley (Mr. Wainwright) said, we have had a cumulative tax system. The logic of that system is that every week one is roughly in balance with one's tax payments and therefore entitled to repayment should one become unemployed.

Mr. Fell: That is correct.

Mr. Horam: I am glad to hear the hon. Gentleman agree. That should appeal to the Government just as much as to any Opposition Member. It is something to which the Government should attach importance. As they would say, the money belongs to the people and not to the Government. It is money that has been overpaid in taxation and that the unemployed are entitled to have repaid.
As the hon. Member for Glasgow, Cathcart (Mr. Maxton) said, the Government have been encouraging people to consider mobility and have been endeavouring to justify their housing policy. They have talked about the need to move to find other jobs. People need every penny they can get if they are to take that big and courageous step of going to another part of the country to find work.
It is not always easy to obtain the repayment quickly in normal circumstances. If a person ceases to be employed, his employer no longer handles his tax matters, and he must deal with them himself. He must take his P45 to the Inland Revenue and claim back the tax. It does not return automatically as it would if, for example, he were on strike and still nominally employed by the same employer, who was still handling his tax matters.

Therefore, even in present circumstances it is by no means easy to get back reasonably quickly the money to which one is morally entitled. It usually takes at least a month before one has the money, which one may badly need earlier.
The hon. Member for Grimsby (Mr. Mitchell) speculated about the possible reasons. I fear that the real reason is the second, dreary one that he suggested—simple administrative convenience. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) extracted from the Government earlier the information that they are committed to engaging another 3,500 civil servants to handle the changes in taxation of short-term benefits. If they continued to handle tax repayments in the traditional way they might need even more. They are having to consider this change in the system to confine the number to 3,500.
If the Government dealt with the matter in two operations, making the repayments separate from the taxing of short-term benefits, I imagine that that would require more civil servants than the Government's proposals imply. I suspect that that is why they are trying to take it all in one go, subtracting one item from the other and giving the taxpayer a net sum. In netting his potential liability to tax on his short-term benefits from any tax repayments due to him, they are cutting administrative corners and taking less administrative time.
It will be interesting to hear what the Chief Secretary says, but I suspect that the real reason is to save Civil Service time in dealing with the consequences of the Government's actions. That is the dreary reason why people are having to be loaded with this additional difficulty at a particularly trying time.

Mr. Stan Thorne: When I look at this part of the Bill I am reminded of the section of the Social Security (No. 2) Act 1980, which results in the withholding of unemployment benefit from, for example, workers dismissed by an employer for belonging to a trade union, a dismissal that results in a picket. Although he has a notice of dismissal from an employer and has a P45, a person on a picket is not eligible for unemployment benefit under that Act. We have before us a similar shabby measure.
This is another stroke by the Government that will inevitably mean hardship for the unemployed. The Chief Secretary may give figures to try to contradict what I am about to say, but I believe that very few unemployed people entitled to unemployment benefit receive more in benefit than they received as earnings. If there are such people, that is a remarkable condemnation of the level of wages paid in some of the industries concerned.
Even if there are those in that position, we are talking about the money of a wage earner which has been taken from him in the expectation that his earnings relate to a position on the PAYE tax code documents and that at the end of the year the amount deducted will relate to the code number that he has had during that period. If he is unemployed for two or three weeks, inevitably his level of earnings, plus whatever benefits he may have received will fall during that period and therefore he will be entitled to some repayment. That must be the case, otherwise the provision would not appear in the Bill.
One can only assume that the purpose is to save money, and it is precisely that which is immoral on the part of the Government, bearing in mind that it does not become their


money until the end of the financial year, when it has been determined that the deduction from the individual employee is due to the Inland Revenue.
I suppose we should not be surprised at the nature of this mean approach by the Government to the unemployed. It is interesting to reflect on the contents of the manifesto put before the electorate by the Conservative Party in 1979. We have seen a plethora of measures taken by this Government that were not spelt out in that manifesto, and this is one of them. It would have been difficult to produce a manifesto that catalogued the hardships that the Government intended to inflict on the people, if elected, and obviously for good political reasons it was not the Conservative party's intention to keep the people very well informed about its intentions. We have had a series of measures that were never put before the British electorate.
That, of course, explains why, on the doorsteps during the past fortnight, we continually heard one name spoken with more hatred than I should care to hear applied to my own name. I refer, of course, to the present Prime Minister. It is clear that the bulk of the electorate—certainly in the North and NorthWest—ascribe their present hardships and difficulties directly to the activities, the hard line, the intransigence, the near demagogy that we hear from the Prime Minister in this House week by week.
It is for those reasons that, not with a great deal of optimism, I hope that we can defeat this measure. If we do not, I am convinced that it is only a matter of time before the electorate throw out of the House the architects of measures of this description who sit on the Treasury Bench.

Mr. Cryer: I can recall, a few days ago, being with a group of Labour Members and having a small debate with the Secretary of State for Employment. The right hon. Gentleman suggested then that debates on unemployment should take place in the House. The same day, I asked the Leader of the House to arrange a general debate on unemployment. The right hon. Gentleman said that the Government had no plans for one. That being so, inevitably we have to focus our attention on the detailed attacks that the Government are making on the unemployed and their resistance to any measure designed to remedy the position of unemployment.
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I must, of course, limit my remarks to the amendment. I want to raise one or two issues. Repayments will be regulated by statutory instrument. I do not want to anticipate amendment No. 32, which recommends that regulation be by affirmative resolution. I object to the Committee handing over an untrammelled power to make regulations for tax purposes to the relevant Minister. It is a device to hand over power to the Civil Service. We have insufficient control of statutory instruments to allow Parliament to exercise adequate scrutiny. In this instance, where provision—not a very clear provision—is envisaged by the Government to repay at some stage money which is already due to unemployed people, there is no reason why the procedure cannot be contained in the Finance Bill and be debated with the rest of the Bill, clause by clause.
It is scandalous to withhold money from the taxpayer and from people whom even the Government must know are in difficulties. Do they realise that when a person is unemployed he is in financial difficulties? Do they know

that it is a shattering experience? We tell them, but it may be difficult for them to grasp. Conservative Members live cossetted lives. They earn £20,000 to £30,000, if they are members of the Cabinet, although those in marginal constituencies have little prospect of continuing in their present role after the next election. Some of them, like the Chief Secretary, will move swiftly into the courts to earn lucrative fees which are the scandal of our legal system. They can earn £400 or £500 a day. So perhaps they do not understand that when a person is unemployed they actually need money because they have no other source of income. When one is unemployed, one's wages disappear and one is reduced to living on unemployment benefit.
Unfortunately,I have come across too many people who have been made unemployed. Sometimes they believe the rubbish that is contained in Conservative newspapers such as the Daily Mail and The Sun, saying that life on the dole is very sunny. Perhaps hon. Members will recall the report in The Sun, when Larry Lamb was busy bribing his way by laying out the inside pages of The Sun in the service of the Conservative Central Office, when he was building up to the accolade of "Sir Larry". It was discovered that there were reciprocal relations between ourselves and Spain for the payment of unemployment money. The Sun's headline was "Olé Dolé". The impression that The Sun gave was of unemployed people sunning themselves on the Spanish coast and going round the corner to collect their unemployment pay.
When the vast majority of people become unemployed their incomes go down with a bump. There is a vast gap between some newspaper campaigns, and what actually happens. Life is not comfortable on the dole, particularly for a family man. A number of difficulties are caused.
The kernel of the argument is that a person rendered unemployed needs money. He needs more than unemployment pay because it is a time of intense difficulty. Yet the Government propose to withhold tax rebates from the unemployed for an unspecified time. We shall be interested to hear the Minister's observations, although I do not understand why the information could not be in the Bill.
More and more people face the problem of unemployment. Already about 2½ million people are unemployed. That will rise to 3 million. The opposition to the Government's policies was demonstrated vehemently last Thursday in one of the most splendid county council wins that the Labour Party has experienced post-war. The writing is on the wall for the Conservatives.
The Prime Minister, when questioned about unemployment on radio or in the House puts on her Saatchi and Saatchi voice. That is a soft, slightly husky tone to show that her concern is there all the time. When the Prime Minister talks about scroungers her voice assumes the slight shrillness that we have come to know. She assumes the hectoring manner which is really hers and which shows that she does not care that much about unemployment. If she cared about the unemployed she would not attack their benefits and she would not introduce such a provision in a Finance Bill. It is no good the Prime Minister using Saatchi and Saatchi words and the soft intonations with which we were regaled after the election. She spent a lot of time learning the techniques. She was trained like a Pavlovian dog to react correctly and to respond for the media.
The Prime Minister is being judged by her actions. The decision that produced this legislation is that of a hard-faced, hard-hearted Cabinet. The Government are attacking people who are in the most difficult position that can be experienced today. The unemployed are bereft. They have been pushed out. Their contacts are diminished and they are no longer needed, whether they are labourers or skilled people. Skills which might have been built up over the years through training, learning and experience are rejected.
Most people know about the reality or the threat of job loss. I was speaking to a constituent about one of his lads who has an apprenticeship with an engineering firm and considers himself to be lucky. My constituent said that when there was talk of redundancy he thought that his lad had had it. Instead, older workers were sacked. An inspector with 27 years' service is out on his neck. That means 27 years of experience and skill is thrown to the winds. That is happening all over West Yorkshire in the textile and engineering industries.
From the bottom of their heart the Government are now saying "It is not enough that you are unemployed, that you are thrown on the scrap heap, that hope is diminished. You will not receive the bit of money that might soften the blow by an infinitesimal amount." The prospects are still gloomy in an economy that is still under-used and under-active. It is a gloomy prospect trying to obtain a job, which the Government are not relieving with a tiny bit of silver in the shape of an immediate tax rebate. It is not even the Government's money. However, we know that the Government are not too choosey when it comes to breaking pledges about people's money.
The earnings-related scheme, which is not financed by the Treasury but is self-financing, will end in 1982. If the directors of an insurance company had broken off such a scheme, the Chief Secretary would prosecute them in the courts. Yet the Government are breaking off the earnings-related scheme. Within the terms of legislation which is far too generous in handing over powers" they are deciding when and how tax which has already been paid, and is the property of the taxpayer, should be repaid. That is not good enough.
I hope that the message gets out of this oak-pannelled place. One comforting aspect of last Thursday's election is that, although we sometimes seem to speak in small groups in the House, and refer wistfully to the message getting outside, the Government's treatment of the economy which is producing so much unemployment is being massively criticised. It is equally clear that the Government's treatment of the unemployed will be massively criticised. This wretched clause in a wretched Finance Bill is an example of the way that the Government are kicking the unemployed when they are down. We shall vote against it. We may not win, but it is another nail in the Government's coffin.

Mr. Campbell-Savours: When the BBC programme "Today in Parliament" is broadcast tonight, many thousands of listeners will wonder where their Conservative Members of Parliament were. I hope that those who broadcast the programme tonight and tomorrow morning will say that there was a long series of Labour speakers about the amendment relating to unemployment.
Conservative Members intervened during the debate, but instead of rising to their feet they sought to make sedentary observations. In the European Parliament the

hon. Member for Lancaster (Mrs. Kellett-Bowman) represents my constitency and four other constituencies in the county of Cumbria. I understand that it is not for me to comment on the hon. Lady's relationship with her constituency. That is for her to do. I am sure that she is an assiduous Member. However, it is noticeable tonight that she has not commented on matters of vital concern.

Mrs. Kellett-Bowman: The hon. Gentleman is aware that when I intervene in the House on matters that concern his constituency he objects most strenuously. I therefore confine my effort on behalf of Cumbria to the European Parliament, and raise in this House only matters that concern my consistituency. That is the proper way to proceed. That view is held on both sides of the House. My hon. Friend the Member for Yarmouth (Mr. Fell) raised a point about unemployment, and he was on his feet when he did so. He gave correct figures, which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) had not given. The hon. Gentleman must admit that my duty in the House is to Lancaster and in the European Parliament to Cumbria.

Mr. Campbell-Savours: The hon. Lady represents Lancaster. She says that she speaks for Lancaster but she has not sought to rise in the debate. The people of Cumbria can rightfully ask whether the case for the unemployed in the county is being put in the European Parliament. We believe that it is not.

Mrs. Kellett-Bowman: rose—

Mr. Campbell-Savours: I turn directly to the amendment—

The Second Deputy Chairman (Mr. Ernest Armstrong): I hope that the hon. Gentleman will return to the amendment.

Mr. Campbell-Savours: I shall do that, Mr. Armstrong. The amendment illustrates perhaps more than any of the others on the Order Paper the Conservative Party's strong prejudice against the unemployed. I understand that the objective of the amendment is to ensure that the tax that is taken prior to unemployment will be paid during unemployment and not at the end of unemployment, or at the end of the subsequent financial year.
The effect of the clause is to draw money from the unemployed that is rightfully theirs, and for the Government to use that money without paying interest on it. I am sure that Conservative Members will be aware that if a taxpayer owes money to the Revenue and if it goes beyond a certain threshold and a certain period, the taxpayer is required to pay interest upon that money to the Inland Revenue.

Mr. Arthur Lewis: My hon. Friend is right in general, but does he agree that if the taxpayer happens to be a member of the Vestey family and is supported by Lord Thorneycroft, the chairman of the Tory Party, it will be ensured that he pays no tax? Money will be filtered into other countries and patriotism will be displayed by the payment of no tax.

Mr. Campbell-Savours: My hon. Friend makes an important intervention. However, the Government have informed us that later in Committee there will be a statement on matters concerning the Vestey empire, if that


is what it be. I am told that there are clauses in the Bill that will tighten the loopholes that that body was able to use.
If the Government require that taxpayers pay interest, I want to know why the Government should not be required to pay interest when they borrow money from my constituents and from the constituents of others. The money that they are keeping is the property of our constituents. Surely it is right that it should be subject to interest payments.
It could be said that our taxpayers have sought not to claim money from the Government but have invested in the Government. It could be said that they have purchased a form of gilt stock. They are purchasing shares in the activities of the Government. The right hon. and learned Gentleman should tell us why taxpayers should not receive some return on the investment that they are making, which they are being required to make by the Government's refusal to pay rebates.
I know that many who go into business treat the tax rebate that they receive at the end of their employment as part of the cash that is necessary to establish their business. When steel workers in my constituency are asked what they intend to do in conditions in which no alternative work is being created, many of them suggest that they want to go into business. They believe that one of the assets that will help them to do so is the tax rebate that is rightfully theirs. The Government are saying that all people who choose to set up a small business will be denied access to that money, either until they register as businesses—and even then there is a delay—or until the beginning of the following financial year.
If the right hon. and learned Gentleman believes that that is incorrect, I can tell him that I was one of those people. His Treasury Ministers will be able to prove that if they dig back far enough. I remember how important my one tax rebate was when I was going into business. I ask the right hon. and learned Gentleman to consider that. If he consults the self-employed bodies outside the House and asks them about the problems that confront people when they are going into business and scratching around for funds, he will find that many self-employed people treated that first tax rebate in the same way as soldiers coming home after the war treated their gratuities. Those rebates are sources of vital cash at a difficult time. Therefore, I ask the right hon. and learned Gentleman to make particular reference to the point that I am making.
This money—it should not be underestimated—which is rightly the property of our unemployed constituents, is of vital importance to them. They can ill afford to lend it to the Government. In conditions of unemployment, people always have cash flow problems. Their problems are far greater when their expenses are greater.
One of the interesting aspects of the current round of unemployment is that it is affecting not only lower-paid groups but large numbers of people who earn reasonable wages and salaries. Those people have a particular use for this tax rebate. The right hon. and learned Gentleman has told them that that money is no longer theirs. He has said that the Government are borrowing it and that they shall do with it what they want. He is saying that those people cannot have it back until the financial year ends or until his Government decide that they will create conditions in which those people will be put back to work. For many people, that may be a long time.

Mr. Arthur Lewis: I had not intended to take part in the debate until I heard my hon. Friend the Member for Workington (Mr. Campbell-Savours) speak. I then thought how unfair the measure was and I wondered how any Government, whatever their political complexion, could bring forward such a measure.
We have a system whereby some—usually the poorer sections of the population or those on more limited means of earning capacity—pay their tax on a PAYE basis. Because of that, they cannot fiddle and work in the same way as the others who are often able to get away with that. Those who are not on PAYE dodge or fiddle legally. As I read in the press almost every day of the week, some well-known entertainer or someone in business who owes the Inland Revenue £20,000, £30,000 or £100,000 has either left the country or has gone bankrupt and will now dodge paying his tax.
The man who is on PAYE, who cannot dodge paying tax whether he wants to or not, is estimated in a year to receive so much money and to be entitled to so many allowances. Therefore, after that is worked out, he will be liable to so much tax. He does not pay that tax willingly, but as he cannot get out of it, he acquiesces. He cannot do much else about it, so he pays.
If, towards the end of the calendar year, through no fault of his own, the man is dismissed, he has to live on only a half or one-third of his normal income. Perhaps he has put off paying certain bills, and he hopes to use the refund from the tax that he has overpaid to pay them—but the Government do not allow that. Rather dishonestly they will now decide when he gets that money back. They will keep it immorally. The tax was calculated for the man working throughout the year, so it should be refunded. If a person found that he had paid in anticipation and been overcharged in a shop, the shop would not be able to say when he would have his refund. It would not be able to say, for example, that he would be paid back only when he was in work.
I can understand the Government wanting to tighten the system to eliminate abuses, to save money and to obtain more for the Inland Revenue, but most of us older ones well remember the saying that there is one law for the rich and another for the poor. It is true today. There is a law on social security for the rich and another for the poor.
A poor man like Lord Thorneycroft gets about £100,000 a year in directors' fees, and, in addition, he gets £44 a day tax free—which for him is equivalent to £120 a day—merely by going to the House of Lords and saying "Hello. I am here." He can then go to the races or wherever he likes. The unemployed man, deprived of his tax rebate, will be paying for the £44 a day that all Members of the House of Lords get.

Sir William Clark: What about Lord Lever?

Mr. Lewis: I could go through the whole lot. Some are millionaires. For some it is worth £150 a day. The unemployed man is paying that, because that money comes out of taxes. He is not getting the interest on the money that he should have. Instead, the money is going towards paying wealthy peers of the realm £44 a day. It is not only the unemployed. The person may be sick or disabled. He may have only one leg, or none at all. If he buys something, he has to pay VAT, which goes to the Treasury. That money goes to pay the £44 per day to Lord


Thorneycroft, Lord Rothermere, Lord Matthews of the Sun, Lord Kagan and all the other noble peers. Moreover, they all have three or four other jobs—sinecures as chairmen of national boards and so forth—all paid for by this unemployed taxpayer who is not allowed to get his money back when he has been overtaxed.
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If ever there was dishonesty in Government, this is it. It is the most dishonest Government and the most dishonest approach that I have seen in more than 50 years in public life and certainly in nearly 37 years in the House. I have never seen any one in any Government do a thing like this. I mean that seriously. It is a crying shame. I am glad that the hon. Member for Yarmouth (Mr. Fell) has been here throughout the debate, although I am also glad to see the newcomers who have just arrived. He himself has said that it is unfair and unreasonable.
We may argue about whether social security is right or wrong and whether there is abuse. We may argue about whether the Government are doing the right thing economically and whether monetarism is right or wrong. But no one could maintain that it is right that a person who through no fault of his own is unemployed and who has overpaid tax not only cannot get his money back but is not even told when he will be able to get it back. There should be provision in the Bill to deal with this.
If I underpay my tax, I get a notice. If I do not pay within 21 days, action will be taken against me and cumulative interest will be added. We should provide that if within three weeks or a month of claiming it the unemployed person does not receive his overpaid tax he will receive cumulative interest on the same basis. These people may be constituents of Conservative Members. Thay have paid their tax. They are not scroungers. Scroungers exist, but these are honest, decent people who through no fault of their own are unemployed, and they want to draw a little money. They may have a little money saved, but why should they draw on that when they have overpaid tax which they should be able to claim back?
Under the Labour Government, I believe, there was a well known actress, Miss Diana Dors. [HON. MEMBERS: "Oh!"] Yes, indeed. She owed £64,000 in tax. How she was allowed to accumulate that kind of debt, I do not know. She went on and on refusing to pay it. Eventually the debt was washed out. The case of a chap called Michael Stern comes up next week. That is a bankruptcy case involving £240 million. He has three Rolls-Royces, a big house and all the rest. So some of them get away with it and not a word is said. I mentioned the Vestey family, who also got away with it. We should therefore protect the interests of hard-working, decent men and women who claim the right of every one of Her Majesty's loyal citizens to claim back overpaid tax and to have it when they want it and not when the Government say that they should have it.

Mr. Ioan Evans: I agree with my hon. Friend the Member for Newham, North-West (Mr. Lewis). Of all the things done by the Government, this measure is a new low in British politics. Unemployment currently stands at 2½ million. It is said that it will reach 3 million by Christmas. Some economic experts and trade union leaders calculate

that it could even reach 4 million. Yet the Government are seeking to prevent the repayment of rebates to those unemployed people.
Last Thursday was an event in British politics. Local elections give hon. Members the opportunity to meet constituents. We learn about the difficult and chronic cases in our surgeries. People tell us how they are having difficulty in obtaining mobility allowances, or how other help has been withdrawn because of Government policies. Local elections give hon. Members a chance to go on the doorstep and meet people.
There is now 17 per cent. male unemployment in my area. More than 3,000 people are unemployed in the valley. Unemployment is not a new problem to the area. However, there is a quantitative change from what has existed in the past. More than 1 million more people have joined the unemployment queues in the last 12 months, and as a result many people now find themselves unemployed for the first time in their lives.
Because of the Government's economic policies, skilled people who have enjoyed employment since before the war now suddenly find themselves unemployed. Some of them get earnings-related supplement, which is designed to tide them over during a difficult period. Many firms of international standing have suddenly ceased to exist. It is no use talking about an economic upturn, because those companies will no longer be there when it comes. Yet those people who have paid their bills and sustained themselves will be prevented from obtaining a rebate on tax that they have already paid.
It is interesting that such a proposal should come from this Government, who said that they would reduce taxation. No wonder there were massive Labour successes last Thursday. The people do not have short memories. They remember that the Tories promised to reduce taxation.
I recently asked a question about direct and indirect taxation in 1981–82. In view of the Tories' pledge, one would have thought that the figures would show a reduction. However, I discovered that in 1978–79 direct taxation amounted to £28 billion and indirect taxation to £30½ billion-a total of £58½ billion. It is estimated that in 1981–82 direct taxation will total £46 billion and indirect taxation £54 billion.
Therefore, this Government, who were elected to reduce taxation, have increased it from £58½ billion in 1978–79 to an estimated £100 billion in 1981–82. I appreciate that inflation has increased and that allowances must be made for that, but there is no doubt that this Government have increased both direct and indirect taxation. In their third Finance Bill, why should the Government contemplate withholding the tax rebates that people are entitled to merely because they are unemployed? If a person is entitled to a tax rebate and is employed, he will receive it. However, the Government intend to pick on the unemployed. In the first Tory Budget the Government increased VAT from 8 per cent. to 15 per cent. The difference between income tax and VAT is that the unemployed do not expect to pay tax. An unemployed person should not have to pay direct tax, because that is based on income. However, VAT is a tax on spending. Therefore, the disabled, the sick, pensioners and the unemployed have seen indirect taxation doubled. That is what the Government did in their first Budget. But it was not enough.
The Labour Party is committed to an irreversible shift of wealth to the masses. In that same Budget the top rate of income tax was reduced from 83 per cent. to 60 per cent. It has been calculated that that reduction of 23 per cent. is worth about £600 per week back in tax. The Government may argue that they need to raise money. If that is so, why do they not reverse what they did in their first Budget? It is diabolical that a Government who gave massive tax concessions to the wealthy should tell the unemployed, whose numbers have increased tremendously as a result of the Government's policies, that they will not receive tax rebates.
The Budget also increased the tax on petrol, cigarettes, and so on. I hope that the Chief Secretary will reconsider the situation. References have been made to the Prime Minister. She is like Marie Antoinette. The unemployed call for bread and she replies "Take off their tax rebates." She is completely out of touch with reality. There have been elections in France. Whatever one might say about the ex-President of France, he did not increase unemployment as the Government have done. Even the French Assembly would not have been offered these stupid, monetarist taxation methods. Therefore, I hope that the Government will reconsider their position.
It must be borne in mind that there are limits in a democracy. The Government have gone beyond those limits, because they have given massive tax concessions to the wealthy. Many people are unemployed for the first time in their lives. They are trying to budget but find that they face increasing expenses. There has been an increase in water rates and local authority rates, and the unemployed face a mass of bills. The Government are primarily responsible, so I hope that they will reconsider their position and accept the amendment.

The Chief Secretary to the Treasury (Mr. Leon Brittan): Perhaps I should make it clear that, despite the blandishments put forward with customary verve by the hon. Member for Aberdare (Mr. Evans), I shall advise the Committee not to accept the amendment which stands in the name of the official Opposition.
The debate has been wide-ranging. In such debates it is not unusual for hon. Members to be tempted to range over the whole of the Government's economic and taxation policies. They are often tempted to go beyond the scope of the amendment. I do not complain of that, but I hope that I shall be forgiven if I do not go down some of the alleyways into which hon. Gentlemen have strayed.
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Before coming to the detail of the amendment, I observe that in the course of some of these wide-ranging observations some strong language was used. In particular, the hon. Member for Grimsby (Mr. Mitchell) used phrases such as "sheer malevolence—[HON. MEMBERS: "Hear, hear."]—"vindictive"—[HON. MEMBERS: "Hear, hear."]—and "embittered"—[HON. MEMBERS: "Hear, hear."] It is a tribute either to his eloquence or to their loyalty that even the repetition of what he said can draw the cheers of his hon. Friends.
The hon. Member for Grimsby and I have known each other for some time. It is a sign of the maturity of a democracy for it to be possible for hon. Members on opposite sides of the Committee to disagree passionately about the consequences of what the Government are doing and the desirability of doing what the Government are seeking to do, but at the same time not to feel that those

who take different views can be inspired only by motives of malevolence, vindictiveness and bitterness. I hope that I shall not reach a time when I am so convinced that I am right that I shall have to conclude that any one who says or does something different can only be vindictive, embittered and malevolent.
Those are general observations. They may have arisen because the debate has not only ranged well beyond the scope of the Bill, but because it has not fully related to the previous debate with which my right hon. Friend dealt. It is clear from what has been said with sincerity by many Opposition Members that the purpose and explanation of the clause have not become apparent to the Committee. Therefore, I welcome the opportunity to clarify it. In particular, I welcome the opportunity to deal with some of the specific points and queries which were raised by, among others, the hon. Members for Gateshead West (Mr. Horam) and Colne Valley (Mr. Wainwright.)
The fundamental question whether unemployment benefit should be taxed was discussed and decided in the previous debate. It is in the context of that Division and decision that this clause has to be considered. In the debate on whether unemployment benefit should be taxed it was pointed out—it could not be disputed—that there was a wide degree of agreement across the Floor of the Committee that in principle it was desirable that unemployment and, indeed, other short-term benefits should be taxed. In putting forward that proposition we were not regarded as being disciples of Genghis Khan. Therefore, it is strange that on the succeeding clause, which does no more than settle—in a way which obviously will not be free from controversy, but is rational—how to implement that principle, these more extravagant allegations should fall from the lips of Opposition Members.
My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), in an intervention, made a highly relevant point to the consideration of these matters. There was agreement across the Floor of the Committee that unemployment benefit should be taxed. I accept that some have said—I do not propose to go over the ground again in arguing why I disagree with the view—that, even if in principle it is right that unemployment benefit should be taxed, this is not the moment or the way to do it. Those are tenable views, although I do not share them. The clause provides a way of taxing unemployment benefit. The amendment seeks to remove that method.

Mr. Cook: If it is the purpose of subsection (a) to facilitate the taxation of unemployment benefit, or, presumably, the taxation of supplementary benefit in lieu of unemployment benefit, why cannot the Minister at least accept amendment No. 28, which would limit the cases of supplementary benefit claimants caught under this subsection to those claimants who are liable to tax under clause 29? Is it not the case that under subsection (a) as drafted, anyone who claims supplementary benefit for any reason, whether or not unemployed, will lose entitlement to any refund?

Mr. Brittan: That is a very strange way for the hon. Gentleman to speak to his amendment No. 28. He did riot come to it, nor did his right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), until an intervention after a lengthy debate—[HON. MEMBERS: "Answer."] I am very happy to deal with the point, but I shall deal with it


in order. There has been a long debate, to which I have listened carefully. I propose to answer the points that have been made before coming to the last-minute matter on amendment No. 28, with which I shall happily deal.
I was about to explain that the proposal to withhold tax refunds from benefit claimants is a basic element of the method chosen by the Government for bringing into tax benefit that is paid to the unemployed. There were alternative ways of doing it, but I shall explain why this was the preferred one. I shall also explain why, granted that the decision has been taken, it is a way of dealing with the matter which is more beneficial to the unemployed.
I deal first with some of the specific subsidiary points that were made. It was suggested that the unemployed person is entitled on a weekly basis to a refund on his tax at present and that, therefore, the change that is made is in some sense subversive. I think that it was the hon. Member for Colne Valley who first said that of the basic structure of the PAYE system. I do not think that that is right. The point that I am making is in a sense a small one, but it illustrates the fact that we do not have an ancient and sacrosanct structure which we are now tinkering with and interfering with unacceptably, but, rather, that the structure is complex, with regulations which have come at different times and which cannot be regarded as untouchable. The point that I was about to make in illustration, but no more than that—I know that the hon. Member for Edinburgh, Central (Mr. Cook) will not think that I am trying to pick him up on a technicality—is that where a refund is due, it will be paid by the tax office after the first four weeks of unemployment, and thereafter at four-weekly intervals, until the entitlement is exhausted. I say that to illustrate the fact that it is a structure of some complication and ought not to be regarded as sacrosanct.
We have decided not to follow the alternative method of taxing unemployment, which would be to do so in the way that would be described as the current method of operation—in other words, not to operate a version of PAYE on the benefits as they are paid. The reason why that decision was taken is that if that were done, tax would, in a proportion of cases, have to be deducted directly from the benefit, because the allowances given in the PAYE code were reduced, for example, to take account of other income or underpayments of tax from an earlier year.
I am not suggesting that that would happen in the majority of cases, but it would in some. It would not make sense for a person to be paid supplementary benefit or unemployment benefit and to have tax deducted from that benefit. For that reason, the Government decided that the right way to deal with it is to freeze claimants' tax accounts during unemployment. In that way, tax will not be deducted and refunds will not be paid. Liability would be assessed at the end of the period of claim or the end of the tax year, if sooner.
That gives me an opportunity to deal with another point raised by the hon. Member for Colne Valley—the role of the employer. The employer will not be involved because the unemployment benefit office will be responsible for repayment. Statements to the effect that this is robbery or that money that the employee is entitled to is being withheld are irrelevant. Those statements relate to unemployment benefit which is not taxed, but when unemployment benefit is taxed, prima facie one would expect tax to be paid currently. Some hon. Members may

query whether now is the time to introduce that, but the measure has considerable support. Therefore, the question of refunds can be seen in a different perspective. It is reasonable to assume that we shall not require the tax to be paid on a regular weekly basis and similarly we shall withhold the refunds.
While the claimant is receiving taxable income which is currently not being brought into tax, it is anomalous to pay refunds of tax. If refunds were made, he would be receiving back tax paid earlier and, at the same time, building up a liability to tax which he would have to satisfy at the end of his claim or at the end of the tax year. That would be disadvantageous to the taxpayer, because at the end of the tax year, or when he resumed his employment, he would be facing an enormous tax liability. That would be a disincentive to return to work. Once the decision to tax unemployment benefit is taken it will be disadvantageous to make the tax bill payable when a person returns to work. For that reason this method is preferable.

Mr. Horam: The flaw in the right hon. and learned Member's argument is that he is assuming equality in the amount due to the taxpayer by way of tax repayment of money overpaid when in employment and the amount of money that he will pay in tax benefit. Surely the amount of tax paid on benefit will be much smaller than the tax repayment due. The core of the right hon. and learned Member's argument is a false parity.

Mr. Brittan: I was coming to that point next. I intend to analyse what will happen in practice.
In most cases the unemployed person's personal tax allowances will exceed his taxable benefit, but in these cases he will normally have only a small net refund of tax on return to work or at the end of the tax year. On the figures, it will be only a small amount. In the majority of cases there will be the broad balance that the hon. Member for Colne Valley regarded as necessary if this method was to be fair.

Mr. Cook: rose—

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Mr. Brittan: I should proceed.
In the minority of cases where an actual liability to tax arises as a result of unemployment, there is the question of what will happen to the tax that is payable. Before explaining what happens, let me make it clear that if there were any difficulties in such a case they would be infinitely worse if the tax refunds had been paid earlier, when the person concerned was out of work—once we accept the principle that unemployment benefit should be taxed.

Mr. Cook: rose—

Mr. Brittan: I am not giving way.

Mr. Cook: This is intolerable.

Mr. Brittan: The hon. Gentleman can say that to his heart's content. I have listened to a long debate—

Mr. Cook: rose—

The Second Deputy Chairman: Order. It is clear that the Minister is not giving way.

Mr. Brittan: I shall explain what I propose to do, and I shall not take lectures from the hon. Member for Edinburgh, Central as to what is and is not intolerable.


These are complex matters. Many things have been said, and I propose to explain what is involved. I shall then give way, in my own time.

Mr. Cook: The right hon. and learned Gentleman does not know the answers. He is terrified to leave his brief.

Mr. Brittan: The hon. Gentleman can get as heated as he wishes. I assure the hon. Gentleman I shall give way when I wish to do so.
I was explaining a particular point raised by some hon. Members who are concerned with the serious issues involved. I was dealing with the question of what happens in the minority of cases in which an actual liability to tax arises as a result of unemploymemt.
Naturally, there would be some concern if the taxpayer had to pay a lump sum, but that will not happen. The tax will be collected not in a lump sum on the person's return to work but by a subsequent adjustment to his PAYE code, which will lead to an adjustment over a period of time. This is a method of providing for taxation of unemployment benefit that enables the object to be achieved with the minimum of hardship for the unemployed person. I am not saying that it is the only way, but I explained when dealing with the current method why this was preferable.
I was about to deal with amendment No. 28. The right hon. Member for Ashton-under-Lyne did not refer to it in opening, but the hon. Member for Edinburgh, Central corrected him by raising it in an intervention. If the hon. Gentleman wishes to deal with another matter by way of intervention, I am content to give way now.

Mr. Cook: I am much obliged to the right hon. and learned Gentleman for giving way. However, if he is not to give way to Opposition Members when we have genuine questions to put, that bodes ill for the Committee upstairs, as his right hon. Friend the Financial Secretary will tell him.
The right hon. and learned Gentleman said a few minutes ago that it would be anomalous to make a refund where liability to tax was being clocked up by payment of benefit, because it would constitute a disincentive to return to work at the end of the period of unemployment. He has spoken of the person who is unemployed at the start of the tax year, for whom, therefore, there is no tax refund to be withheld, but who may be, as the right hon. and learned Gentleman admits, acquiring a tax liability during the period of unemployment. Why is there not the same disincentive to work when that person can return to employment? Surely the Chief Secretary does not suggest that simply because it is done by adjustment to the PAYE code, which is taken over a period of weeks rather than as a lump sum, he is not thereby increasing substantially the marginal rate of tax that that person pays on returning to work.

Mr. Brittan: To an extent, of course, it is a disincentive, but it is very much less of a disincentive than it would be to do it in the way made necessary by the amendment. It is as simple as that.
I tell the hon. Member for Edinburgh, Central that I have no wish for debates to be more intemperate than the hon. Gentleman feels that he must make them. However, it is one thing to be asked to give way. It is quite another for the hon. Gentleman to demand that I give way

instantly. I think that I am entitled to develop my argument and to give way—as I can assure the hon. Gentleman that I will—at what I regard as a convenient moment.
I move to amendment No. 28. As I understand it, the purpose is to restrict slightly the scope of paragraph (a). As it stands, paragraph (a), with the initial four lines of clause 29, gives power for regulations to be made providing for tax refunds to be withheld from claimants of unemployment benefit or supplementary allowance for their period of claim. The purpose of the amendment is to restrict the provision to withhold refunds so that it applies only in the case of benefit claimants whose benefit is taxable.
I am happy to tell the Committee that the Government are prepared in principle to accept the amendment. However, there is some doubt whether its wording is appropriate to the purpose. Therefore, I hope that the Committee will be content if I say that the Government will examine the drafting and seek to bring forward on Report an appropriate form of words to meet the point. It may be convenient, if the Opposition are content on that basis, for the amendment to be withdrawn; otherwise, I shall have to invite my right hon. and hon. Friends to vote against it.
The remainder of the amendments in this grouping are fundamentally subversive to the purpose of the clause and therefore cannot be accepted.

Mr. Cook: The Chief Secretary began his remarks by referring to my hon. Friend the Member for Grimsby (Mr. Mitchell), who made a notable speech in our preceding debate. The right hon. and learned Gentleman took my hon. Friend to task for speaking in such a passionate and, according to him, intemperate manner. He said that he hoped that he would never be so embittered as to be convinced that he was right, in the way that my hon. Friend spoke.
I am sure that all Opposition Members will agree that my hon. Friend was right to speak as he did. We have to make the point that it is not surprising that there should be bitterness—given the rate at which this Government have increased unemployment—and that that bitterness should come to a head in a debate that follows a cumulative attack by the Government on the standard of living of those whom they themselves have thrown out of work.
All that my hon. Friend the Member for Grimsby did was to articulate the bitterness that is felt already by those who have lost their jobs and the anger that will be felt by those same people as they continue to find their standard of living eroded by the Government's policy both on their benefits and on their taxation. It would be a neglect of the duty of hon. Members if that anger and bitterness were not articulated in a debate on this subject.
Having said that, I am glad that the Chief Secretary has found his way to accept the principle of amendment No. 28. However, it is a strange state of affairs that the Opposition have to tidy up the provisions of a Bill that has come from the Treasury draftsmen.
The Chief Secretary has acknowledged that as it stands the subsection would bite on many people who would not have taxable incomes under clause 27.
I am glad that the Government have accepted the principle of amendment No. 28, but I must draw the Chief Secretary's attention to the debate on the next subsection, when we shall debate the same principle. The following subsection bites even deeper. I hope that the right hon. And


learned Gentleman will be able to accept the similar amendment that is based on a parallel principle in our next debate.
However, as the Chief Secretary said, the remaining amendments, particularly amendment No. 25, are subversive of the whole subsection. I am happy to confirm that they are, indeed, subversive of the principle contained in the subsection and we are happy to stand by that subversion, even with the modest improvement that the Chief Secretary announced. We stand by the amendment because we find the principle of the subsection obnoxious.
As the Chief Secretary admitted, we have a cumulative system of taxation in which the tax liability is based on the assumption that the income will be maintained over the year. It necessarily follows that if, in the course of the year, the taxpayer loses the source of income and employment, he has paid too much tax while in employment. Having paid too much tax over the previous months, he is entitled to get that tax back.
We find the subsection obnoxious because it provides a means by which the Treasury can cheat—albeit legally—the taxpayer of his right to get the money back. The taxpayer has paid too much tax in the past, and the Treasury will take power to pocket it and retain it at its pleasure, because it is more convenient to approach the taxation of benefit on that basis.
That is undesirable, for two reasons. First, it is arbitrary. The amount of refunds will vary, and the amount of liability for tax to be deducted from those refunds, even accepting taxation on unemployed benefit, will vary. Let us consider the case of a skilled man who has worked for nine months in the financial year and who, over that time, has paid a substantial amount of income tax. If that skilled man becomes unemployed he will be entitled to a substantial refund. At the end of the financial year he will be entitled to a refund because, as the Chief Secretary acknowledged, he is likely to be liable only for a small amount of tax on the unemployment benefit that he receives.
The Financial Secretary admitted that 90 per cent. of those whose refunds were withheld would have refunds in excess of any tax liability that would arise on the unemployment benefit. So 90 per cent. of taxpayers will have withheld from them a sum in tax refund greater than anything for which they will be liable as a result of taxation of unemployment benefit. There is no possible justification for making all of them wait until the end of the financial year before they get any money back, although it may be egregiously in excess of their tax liability.

Mr. Campbell-Savours: Did my hon. Friend hear the Chief Secretary say earlier that when the taxpayer owed the Revenue at the end of the financial year and at the beginning of the period of employment, the money would be paid through in his coding for the following year? Does that mean that conversely, when the taxpayer is owed money by the Revenue, instead of a block payment being made the sum due may be paid over the period of the following year, in the form of a coding?

Mr. Cook: That is more for the Chief Secretary than for me, but I understand that he said that where the unemployed person is unemployed at the outset of the financial year, and therefore has no tax refund due to him,

the tax liability that will accrue will be deducted, when he returns to work, by an increase in his PAYE code. As the Chief Secretary condeded, that means that the person will pay a higher rate of marginal taxation when he returns to work. A higher rate of tax will be deducted from his pay than is deducted from the pay of his fellow workers. When he returns to work, when he could look forward to recouping his income, he will pay a higher rate of tax than will people who were employed when he was not. That is the first reason why the approach is undesirable. It withholds from taxpayers money that they have paid in tax and that they are entitled to get back.

Mr. Brittan: I wish to deal with the question asked by the hon. Member for Workington (Mr. Campbell-Savours). I thought that I made it clear that a refund that is due will be paid in a lump sum at the moment in question.

Mr. Cook: The second reason why we regard the approach as undesirable is that a refund due to the taxpayer, much of which will remain due irrespective of tax liability, will be paid at the end of the period of unemployment. That is daft. The taxpayer needs his money back when he is unemployed and not when he is back at work.
The Chief Secretary has achieved the remarkable feat of withholding money from the taxpayer when he needs it most and returning it when his need is less pressing. That is being done to facilitate the convenience of the Treasury to tax unemployment benefit. That is daft.
We should remember that Government Members campaigned at the last election on the basis that people were paying too much tax. They said that they would relieve the public of that tax burden. They also argued that the country groaned under too much bureaucracy and that therefore individual freedom and creativity were being suppressed. They promised to liberate that freedom and creativity by curbing bureaucracy. Yet the Government are introducing a measure that creates a fresh burden of taxation administered on the basis of that same bureaucracy. The Government say that to suit their convenience they will not pay tax refunds that are due to the taxpayer.
I find that proposition harsh and lacking in logic. It is intolerable that the Government are prepared to say to an unemployed person that it is convenient for them to hold on to his money until he returns to work when it is so inconvenient for that person to lend it to the Government when he is unemployed. If that is the only way to achieve taxation of short-term benefits without employing even more than 3,500 civil servants, the whole system should be scrapped. The Committee would take a positive step towards scrapping that system by voting for the amendment.

Question put, That the amendment be made: —

The Committee divided: Ayes 223, Noes 277.

Division No. 176]
[10.18 pm


AYES


Abse, Leo
Ashton, Joe


Adams, Allen
Atkinson, N.(H'gey,)


Allaun, Frank
Bagier, Gordon A.T.


Alton, David
Barnett, Guy (Greenwich)


Anderson, Donald
Barnett, Rt Hon Joel (H'wd)


Archer, Rt Hon Peter
Benn, Rt Hon A. Wedgwood


Ashley, Rt Hon Jack
Bennett, Andrew(St'kp't N)






Bidwell, Sydney
Holland, S. (L'b'th, Vauxh'll)


Booth, Rt Hon Albert
Homewood, William


Boothroyd, Miss Betty
Hooley, Frank


Bray, Dr Jeremy
Horam, John


Brocklebank-Fowler, C.
Howell, Rt Hon D.


Brown, R. C. (N'castle W)
Howells, Geraint


Brown, Ron (E'burgh, Leith)
Hudson Davies, Gwilym E.


Buchan, Norman
Hughes, Mark (Durham)


Callaghan, Rt Hon J.
Hughes, Robert (Aberdeen N)


Callaghan, Jim (Midd't'n &amp; P)
Hughes, Roy (Newport)


Campbell, Ian
Janner, Hon Greville


Campbell-Savours, Dale
Jay, Rt Hon Douglas


Canavan, Dennis
John, Brynmor


Cant, R. B.
Johnson, James (Hull West)


Carmichael, Neil
Johnston, Russell (Inverness)


Carter-Jones, Lewis
Jones, Rt Hon Alec (Rh'dda)


Clark, Dr David (S Shields)
Jones, Barry (East Flint)


Cocks, Rt Hon M. (B'stol S)
Jones, Dan (Burnley)


Concannon, Rt Hon J. D.
Kaufman, Rt Hon Gerald


Cook, Robin F.
Kerr, Russell


Cowans, Harry
Kilroy-Silk, Robert


Craigen, J. M.
Kinnock, Neil


Crowther, J. S.
Lambie, David


Cryer, Bob
Lamborn, Harry


Cunliffe, Lawrence
Leadbitter, Ted


Cunningham, G. (Islington S)
Leighton, Ronald


Cunningham, Dr J. (W'h'n)
Lestor, Miss Joan


Dalyell, Tam
Lewis, Arthur (N'ham NW)


Davidson, Arthur
Litherland, Robert


Davies, Ifor (Gower)
Lyon, Alexander (York)


Davis, Clinton (Hackney C)
Lyons, Edward (Bradf'd W)


Davis, T. (B'ham, Stechf'd)
Mabon, Rt Hon Dr J. Dickson


Deakins, Eric
McCartney, Hugh


Dean, Joseph (Leeds West)
McElhone, Frank


Dempsey, James
McKelvey, William


Dewar, Donald
MacKenzie, Rt Hon Gregor
 
Dixon, Donald
McMahon, Andrew


Dobson, Frank
McNally, Thomas


Dormand, Jack
McNamara, Kevin


Douglas-Mann, Bruce
McWilliam, John


Dubs, Alfred
Magee, Bryan


Duffy, A. E. P.
Marks, Kenneth


Dunn, James A.
Marshall, D(G'gow S'ton)


Dunnett, Jack
Marshall, Dr Edmund (Goole)


Dunwoody, Hon Mrs G.
Marshall, Jim (Leicester S)


Eadie, Alex
Martin, M(G'gow S'burn)


Eastham, Ken
Mason, Rt Hon Roy


Ellis, R. (NE D'bysh're)
Maxton, John


English, Michael
Maynard, Miss Joan


Ennals, Rt Hon David
Mellish, Rt Hon Robert


Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Ewing, Harry
Mitchell, Austin (Grimsby)


Faulds, Andrew
Mitchell, R. C. (Soton Itchen)


Field, Frank
Morris, Rt Hon A. (W'shawe)


Fitch, Alan
Morris, Rt Hon C. (O'shaw)


Flannery, Martin
Morris, Rt Hon J. (Aberavon)


Fletcher, Ted (Darlington)
Morton, George


Foot, Rt Hon Michael
Newens, Stanley


Ford, Ben
Oakes, Rt Hon Gordon


Forrester, John
Ogden, Eric


Foster, Derek
O'Halloran, Michael


Fraser, J. (Lamb'th, N'w'd)
O'Neill, Martin


Freeson, Rt Hon Reginald
Orme, Rt Hon Stanley


Garrett, John (Norwich S)
Palmer, Arthur


George, Bruce
Parry, Robert


Gilbert, Rt Hon Dr John
Prescott, John


Ginsburg, David
Price, C. (Lewisham W)


Graham, Ted
Race, Reg


Grant, George (Morpeth)
Radice, Giles


Grimond, Rt Hon J.
Rees, Rt Hon M (Leeds S)


Hamilton, James (Bothwell)
Richardson, Jo


Hamilton, W. W. (C'tral Fife)
Roberts, Albert (Normanton)


Harrison, Rt Hon Walter
Roberts, Allan (Bootle)


Hart, Rt Hon Dame Judith
Roberts, Ernest (Hackney N)


Hattersley, Rt Hon Roy
Roberts, Gwilym (Cannock)


Haynes, Frank
Robertson, George


Healey, Rt Hon Denis
Robinson, G. (Coventry NW)


Heffer, Eric S.
Rooker, J. W.


Hogg, N. (E Dunb't'nshire)
Ross, Ernest (Dundee West)





Ross, Stephen (Isle of Wight)
Tinn, James


Rowlands, Ted
Torney, Tom


Ryman, John
Wainwright, E.(Dearne V)


Sever, John
Wainwright, R.(Colne V)


Sheerman, Barry
Walker, Rt Hon H.(D'caster)


Sheldon, Rt Hon R.
Watkins, David


Shore, Rt Hon Peter
Weetch, Ken


Short, Mrs Renée
Wellbeloved, James


Silkin, Rt Hon J. (Deptford)
Welsh, Michael


Silkin, Rt Hon S. C. (Dulwich)
White, Frank R.


Skinner, Dennis
White, J. (G'gow Pollok)


Smith, Rt Hon J. (N Lanark)
Whitlock, William


Snape, Peter
Wigley, Dafydd


Soley, Clive
Willey, Rt Hon Frederick


Spearing, Nigel
Williams, Rt Hon A.(S'sea W)


Spriggs, Leslie
Wilson, Rt Hon Sir H.(H'ton)


Stallard, A. W.
Wilson, William (C'try SE)


Stewart, Rt Hon D. (W Isles)
Winnick, David


Stoddart, David
Woodall, Alec


Stott, Roger
Woolmer, Kenneth


Straw, Jack
Wright, Sheila


Summerskill, Hon Dr Shirley
Young, David (Bolton E)


Thomas, Dafydd (Merioneth)



Thomas, Jeffrey (Abertillery)
Tellers for the Ayes:


Thomas, Dr R.(Carmarthen)
Mr. Donald Coleman and Mr. Allen McKay.


Thorne, Stan (Preston South)



Tilley, John





NOES


Adley, Robert
Cockeram, Eric


Aitken, Jonathan
Colvin, Michael


Alexander, Richard
Cope, John


Alison, Michael
Corrie, John


Amery, Rt Hon Julian
Cranborne, Viscount


Ancram, Michael
Critchley, Julian


Aspinwall, Jack
Crouch, David


Atkins, Robert(Preston N)
Dean, Paul (North Somerset)


Baker, Kenneth(St.M'bone)
Dickens, Geoffrey


Baker, Nicholas (N Dorset)
Dorrell, Stephen


Banks, Robert
Dover, Denshore


Bell, Sir Ronald
du Cann, Rt Hon Edward


Bendall, Vivian
Dunn, Robert (Dartford)


Benyon, Thomas (A'don)
Dykes, Hugh


Benyon, W. (Buckingham)
Eden, Rt Hon Sir John


Berry, Hon Anthony
Edwards, Rt Hon N. (P'broke)


Best, Keith
Eggar, Tim


Bevan, David Gilroy
Elliott, Sir William


Biggs-Davison, John
Emery, Peter


Blackburn, John
Eyre, Reginald


Blaker, Peter
Fairgrieve, Russell


Body, Richard
Faith, Mrs Sheila


Bonsor, Sir Nicholas
Fell, Anthony


Boscawen, Hon Robert
Fenner, Mrs Peggy


Boyson, Dr Rhodes
Fisher, Sir Nigel


Braine, Sir Bernard
Fletcher, A. (Ed'nb'gh N)


Bright, Graham
Fletcher-Cooke, Sir Charles


Brinton, Tim
Fookes, Miss Janet


Brittan, Leon
Forman, Nigel


Brooke, Hon Peter
Fowler, Rt Hon Norman


Brotherton, Michael
Fox, Marcus


Brown, Michael(Brigg &amp; Sc'n)
Fraser, Rt Hon Sir Hugh


Browne, John (Winchester)
Fraser, Peter (South Angus)


Bruce-Gardyne, John
Fry, Peter


Bryan, Sir Paul
Gardiner, George (Reigate)


Buchanan-Smith, Alick
Gardner, Edward (S Fylde)


Buck, Antony
Garel-Jones, Tristan


Budgen, Nick
Gilmour, Rt Hon Sir Ian


Bulmer, Esmond
Glyn, Dr Alan


Burden, Sir Frederick
Goodlad, Alastair


Butcher, John
Gow, Ian


Cadbury, Jocelyn
Gower, Sir Raymond


Carlisle, John (Luton West)
Gray, Hamish


Carlisle, Kenneth (Lincoln)
Greenway, Harry


Carlisle, Rt Hon M. (R'c'n)
Griffiths, E.(B'y St. Edm'ds)


Chalker, Mrs. Lynda
Griffiths, Peter Portsm'th N)


Churchill, W. S.
Grist, Ian


Clark, Hon A. (Plym'th, S'n)
Grylls, Michael


Clark, Sir W. (Croydon S)
Hamilton, Hon A.


Clarke, Kenneth (Rushcliffe)
Hamilton, Michael (Salisbury)


Clegg, Sir Walter
Hampson, Dr Keith






Hannam, John
McNair-Wilson, P. (New F'st)


Haselhurst, Alan
McQuarrie, Albert


Hastings, Stephen
Madel, David


Hawksley, Warren
Major, John


Hayhoe, Barney
Marland, Paul


Heddle, John
Marlow, Tony


Henderson, Barry
Marshall, Michael (Arundel)


Heseltine, Rt Hon Michael
Maude, Rt Hon Sir Angus


Hicks, Robert
Mawby, Ray


Higgins, Rt Hon Terence L
Mawhinney, Dr Brian


Holland, Philip (Carlton)
Maxwell-Hyslop, Robin


Hooson, Tom
Mayhew, Patrick


Hordern, Peter
Mellor, David


Howell, Rt Hon D. (G'ldf'd)
Meyer, Sir Anthony


Hunt, David (Wirral)
Miller, Hal (B'grove)


Hunt, John (Ravensbourne)
Mills, lain (Meriden)


Hurd, Hon Douglas
Mills, Peter (West Devon)


Jenkin, Rt Hon Patrick
Miscampbell, Norman


Johnson Smith, Geoffrey
Moate, Roger


Jopling, Rt Hon Michael
Molyneaux, James


Kaberry, Sir Donald
Monro, Hector


Kellett-Bowman, Mrs Elaine
Montgomery, Fergus


Kimball, Marcus
Moore, John


King, Rt Hon Tom
Morris, M. (N'hampton S)


Kitson, Sir Timothy
Morrison, Hon C. (Devizes)


Knox, David
Morrison, Hon P. (Chester)


Lamont, Norman
Mudd, David


Lang, Ian
Murphy, Christopher


Langford-Holt, Sir John
Myles, David


Latham, Michael
Neale, Gerrard


Lawrence, Ivan
Needham, Richard


Lawson, Rt Hon Nigel
Nelson, Anthony


Lee, John
Neubert, Michael


Le Marchant, Spencer
Newton, Tony


Lennox-Boyd, Hon Mark
Normanton, Tom


Lloyd, Ian (Havant &amp; W'loo)
Onslow, Cranley


Lloyd, Peter (Fareham)
Page, Rt Hon Sir G. (Crosby)


Loveridge, John
Page, Richard (SW Herts)


Luce, Richard
Parkinson, Cecil


Lyell, Nicholas
Parris, Matthew


McCrindle, Robert
Patten, Christopher (Bath)


Macfarlane, Neil
Patten, John (Oxford)


MacGregor, John
Pattie, Geoffrey


MacKay, John (Argyll)
Pawsey, James


Macmillan, Rt Hon M.
Peyton, Rt Hon John


McNair-Wilson, M. (N'bury)
Pink, R. Bonner

Question accordingly negatived

Mr. Cook: I beg to move amendment No. 30, in page 18, line 40, leave out paragraph (b).

The Second Deputy Chairman: With this it will be convenient to take amendment No. 31, in page 18, line 40, leave out from 'is' to end of line 4 on page 19 and insert
'in receipt of supplementary allowance reduced by application of section 8 of the said Act of 1979 (trade disputes) and paragraph 10 of Schedule 2 to the Supplementary Benefit (Requirements) Regulations 1980 applies to him.'.

Mr. Cook: The hour is growing late. I appreciate that it would be the wish of the Committee to make progress as speedily as possible, consisitent with doing justice to the clauses which have been put before us by the Treasury. Therefore, I do not propose to rehearse in this debate the general arguments on why the striker should be singled out for special treatment among those who claim supplementary benefit in the way in which we dealt with them in clause 27.
I stand by anendment No. 30. The Opposition may wish to divide on it, but the arguments on it are on an issue of principle which we substantially debated when we debated the parallel amendment to clause 27. I therefore turn to amendment No. 31. I am encouraged to do so by the response of the Chief Secretary to our previous debate, when he accepted the principle of our amendment No. 28 to limit the withholding of refunds to claimants who came within the scope of the tax provisions of clause 27.
As the Chief Secretary will have apprehended, amendment No. 31 would do for the striker what amendment No. 28 was intended to do for the unemployed person. In other words, amendment No. 31 would limit the scope of the subsection to strikers who have made a claim for supplementary benefit which is taxable under clause 27. I go further and say—I hope with some confidence—that at least amendment No. 31 is not defective, because it lifts bodily the wording of clause 27 and inserts it as our amendment. If we are defective, it follows that the Bill is defective in the first place.
The Chief Secretary admitted in his reply to the previous debate that the subsection to which he was speaking went wider in its application than to households who would find that they had a taxable benefit under clause 27. Not only does the subsection also so wider in its application than strike families whose benefits would be taxable under clause 27, but the vast majority of households who would find that their refund was withheld under the subsection would have no benefit which was taxable under clause 27.
I can demonstrate that from figures produced by the Government. In answer to a parliamentary question, a former Minister at the Department of Health and Social Security gave the percentage of strikers in receipt of supplementary benefit. It varied from 3·3 per cent. in 1975 to 1·1 per cent. in 1979. In a previous debate, we explored the myth that the generosity of supplementary benefit enabled strikers to subsist. Only a tiny fraction of strikers claim benefit, and many in that tiny fraction claim only derisory amounts. In no year between 1975 and 1979 did more than 5 per cent. of those on strike claim supplementary benefit. Nineteen out of 20 did not claim benefit, which demonstrates more clearly than the rhetoric of the previous debate that it is fanciful to suggest that the

generosity of supplementary benefit encourages people to strike. It has nothing to do with supplementary benefit, which is not available to the majority of strikers.
More than 95 per cent. of strikers do not claim supplementary benefit. As worded, the subsection would also cover that 95 per cent. It bites on both categories. For those 95 per cent. there is no benefit which is liable to tax. A striker with no dependants cannot claim supplementary benefit. In long strikes, single people subsist on their tax refunds. The subsection will deny those people their own money on which they have hitherto relied.
I am anxious to find out what possible reason the Government will give for the arrangement. What is their justification for singling out strikers, even those who are not claiming benefit? In a previous debate the Financial Secretary said that strikers were carrying out a voluntary activity. Will we be told that the reason is that strikes damage the economy? We were also told that strikers were taking action consistent with improving their income. All those arguments are risible, but are preferable to the breathtaking argument that it is administratively convenient to treat all strikers the same, which is further insulting to those who will have their own money withheld from them, even though the State will not give them any benefit. It would be an outrage. I hope that the Chief Secretary will spare us that.
I hope that, as in the previous debate, the right hon. Gentleman will accept, at least in principle, that the scope of the subsection should be limited to households that are covered by clause 27. Anything else could be explained only on the basis of the arguments used by my hon. Friends in previous debates—namely, that the measure is put forward in a vindictive spirit, to penalise the striker. The Chief Secretary took exception to those terms. I assure him that none would be happier than we to withdraw those phrases if he could establish that there is a rational ground for withholding refunds to those not claiming benefit. If he cannot do that he will confirm the accusation that there is no rational explanation for such a proposal and that it can rest only on a vindictive attitude towards the striker and his family.

Mr. Ennals: Like my hon. Friend the Member for Edinburgh, Central (Mr. Cook) I look forward with great interest to hearing the Minister's justification for this measure. We have already passed a mean and miserable measure penalising the unemployed. The Government now seek to pass a measure which will be even more damaging to those involved in industrial relations. As I understand it, under the previous clause, tax rebates will be withheld until the end of the year or the end of the period of unemployment. But for those involved in trade disputes, rebates will be withheld until the end of the dispute, even if the tax year ends before that.
Why are those involved in trade disputes to be treated differently from the unemployed in this respect? I can only regard it as a vendetta against those involved in industrial disputes, whatever the rights or wrongs of the dispute may be. What can be the Government's justification for doing this in the first place, and for taking it further in this provision than in the previous clause? What is the Government's view of the legality of industrial disputes? If those involved in industrial disputes are to be placed in a separate category from the unemployed, whom we have already treated meanly, that issue must arise. Is there something illegal about industrial action? If so, why do not


the Government declare it to be illegal? Is there something worthy of victimisation about those involved in industrial action, whatever may have been the cause of that action? Are industrial disputes automatically wrong, even if the employer is in breach of a solemn agreement reached with his employees? Why should we assume that those involved in an industrial dispute should automatically be penalised by the tax laws that the Government wish to introduce?
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) referred earlier to the Government's attitude to the Civil Service. I shall not take that any further. I merely point out that those who will suffer most if the clause is passed will not be those on high pay. Those who will be hit will be those on the lowest pay, who most need the rebate. People on high rates of pay will be able to manage without the rebate to which they are entitled. It is those living from week to week or month to month who will need the rebate.
The question must be asked. Whose money are we talking about? We are talking about money that belongs to the citizens of this country. Any Government who decide to withhold, for however long, tax rebates due to citizens are taking away the rights of their own citizens. The Government claim to believe that we are too heavily taxed, yet they are simply picking on those at the lowest end of the scale. This paragraph is almost as iniquitous as the previous paragraph dealing with tax rebates to the unemployed.
10.45 pm
I see the proposal as a vendetta against those involved in an industrial dispute. What action do the Government propose to take against employers who may be responsible for an industrial dispute? None at all. What about those involved in an industrial dispute who have had no part in the decision? They and their families will still be penalised. What possible justification is there not only for withholding tax rebates during unemployment, but during trade disputes?
I am also worried about the position of single people involved in a trade dispute who are not entitled to supplementary benefit and who may have no other source of income. What justification is there for denying them the right to a tax rebate until they have returned to work or until the dispute is over?
The Government are denying to the citizens funds which are the citizens' funds. If there has been an over-payment of tax, it is the Government's responsibility to ensure that that money is returned to the citizen at the earliest possible moment. Their motives for not doing so can only be that they wish to penalise the unemployed and bring excessive political pressures upon those who rightly and properly take part in industrial disputes.

Mr. Winnick: Although the hour is late, the principle is important. It is so important to Labour Members that we are entitled to make these remarks, however briefly.
This is a vindictive measure. It will undoubtedly strengthen the view of Conservative Members that they are getting their way—at least, the view of those Conservative Members who are militant in their anti-trade union feelings. Only recently we learnt that there had been

increasing pressure on the Secretary of State for Employment to introduce more penal measures against the trade unions and strikers.
Under the clause, the tax refund will be withheld until the person goes back to work. As my right hon. Friend the Member for Norwich, North (Mr. Ennals) said, that is even worse than the person who is unemployed. At least in his case, the refund will be paid either when he goes back to work or at the end of the tax year. But if a person goes on strike the tax refund will be withheld until he returns to work. That is why we stronly object to this proposal. The money that belongs to the citizen will not be returned to him, even though he has not committed a crime. Even under this Government strikes are not illegal. [HON. MEMBERS: "Yet."] The citizen has exercised his democratic rights, yet will be penalised in every conceivable way. The Budget and the Finance Bill are being used as a means of punishing the striker.
In effect, the Government are saying "We cannot take away your right-to strike, but we inend to do everything to hurt you by fiscal means." Labour Members believe that the clause is an open, anti-trade union measure. Earlier today the Financial Secretay was quite blunt. When pressed he said that strikes caused real damage. To do him justice, the Financial Secretary was only echoing the view of many of his right hon. and hon. Friends. They do not like strikes. They object to the withdrawal of labour. They consider that wrong. On the other hand, we believe that in the large majority of cases people do not strike lightly or because of wicked agitators. They do so because they passionately believe that there is no other way of resolving their difficulties.
I speak as an active lay member of a white-collar union. Like several white-collar unions, my union experiences difficulties over recognition. Unbelievable as it may seem in the 1980s the union experiences difficulties similar o those seen at Grunwick. In that case, people were refused the elementary right to belong to a trade union at their place of work. [Interruption.] We know the reactions of Conservative Members who have no sympathy for workers who are struggling for the basic right of recognition for their trade union.
If workers decide that there is no alternative—as in the Grunwick dispute—but to take industrial action, they will not be entitled, of course, to supplementary benefit. A striker's family is entitled to some benefit. Although supplementary benefit is the bare minimum on which to exist, £12 is being deducted because of the measures that the Government took last year. Clearly, both the striker and his family will find themselves in dire financial difficulties. The striker might have hoped for a tax refund, but the clause will deny him that.
The chairman of ACAS has not been associated with the trade union side of industry. When he gave his report, he said that employers were wrong to exploit the present difficulties over unemployment and to break agreements. No doubt the breaking of a number of agreements will lead to strike action. We know that the Government intend to penalise those who exercise their rights. Many of us in the trade union and Labour movement are sickened because the Tory Government and Tory Members go on and on about Poland. They say that they sympathise with the workers there and appreciate what is being done. Labour Members understand and appreciate the struggle of Polish workers in the past 12 months to obtain basic democratic rights. We also, however, support the right of working


people in Britain to defend their living standards and, if necessary, to take strike action. They have a right to do that in Britain. We are not hypocrites. We do not support strikes only when they occur in Eastern Europe.
The trade union movement has a pretty long memory. We have not forgotten the Industrial Relations Act 1971 of the previous Conservative Government. The trade union movement will not forget the Employment Act 1980 or the squalid little penal measures that are aimed at undermining the citizen's right to take strike action. When a Labour Government are re-elected, we must ensure that the shabby, squalid measures that are aimed against the trade union movement are removed from the statute book as quickly as possible.

Mr. Maxton: It will be interesting to hear the Chief Secretary's reply to this debate. Under clause 29(a) those who claim unemployment benefit cannot claim a rebate. Clause 29(b) covers those who cannot receive unemployment benefit. They will not be able to receive a rebate, either. On Clause 29(a) the Chief Secretary argued that the measure was for administrative convenience and would ensure that no one would suddenly find himself with a massive tax bill at the beginning of a financial year or on returning to work. He cannot put forward that argument now. In this instance, a person is not entitled to unemployment benefit. He will not be paid unemployment benefit, so he will not pay tax. There is no way in which an adjustment can be made at the end of the period during which he is on strike. It would mean that he would be paying tax instead of receiving a rebate. The clause should not be in the Finance Bill. It should be presented not by a Treasury Minister, but by the Department of Employment, because this is not about tax revenue and rebates; it is about trade union legislation.
As my hon. Friend the Member for Walsall, North (Mr. Winnick) said, this is a way of hitting the striker. This is vindictiveness by the Government. They believe that strikes are wrong. As my hon. Friend said, strikes in Poland are all right, but the Government and their supporters do not believe they should take place in any circumstances in this country. Indeed, they will do everything possible to ensure that they do not take place, to the extent of stopping a person getting money to which he is entitled.
The Chief Secretary cannot put forward the argument that he set out the last time round; he can argue this matter only on anti-trade union legislation grounds. He is trying to stop people going on strike. In an attempt to do that, he will stop them getting money to which they are entitled. I am not an expert on fiscal matters and I hope that the Chief Secretary will explain some of these points. The first part of the clause makes it clear who will not get rebates—namely, those who are
disqualified at the time from receiving unemployment benefit by virtue of section 19 of the Social Security Act 1975 or section 19 of the Social Security (Northern Ireland) Act 1975".
But will the Chief Secretary explain what is meant by
or would be so disqualified if he otherwise satisfied the conditions for entitlement"?
If people are disqualified on the first ground, on what other ground will they be disqualified as well?
Who will be covered? Will those who have taken strike action be covered? will those who form part of a trade union which has called them out on strike be covered? If an employer locks out the whole work force—not just those who are in dispute—will those not in dispute be

disqualified from receiving a rebate? Some workers may be locked out by their employer as a result of a dispute between him and others of his work force.
Will the right hon. and learned Gentleman tell me what is meant by
and such regulations may make different provision with respect to persons falling within paragraph (b) above from that made with respect to other persons"?
What will the regulation say? I find this part unclear. I am not sure what is meant by it. It seems to give the Government the opportunity to introduce harsher measures against those who may be in dispute with their employers than is implied in this harsh clause.
The Minister must give us some clear answers. I accept that the hour is late, but answers are required. We consider this to be part not of the Government's fiscal strategy and economic policy but of their vindictive campaign against the trade union movement.

11 pm

Mr. Brittan: The two amendments are not acceptable to the Government. The first amendment seeks to remove from the clause the power to provide regulations for tax refunds to be withheld from strikers until the end of the strike. The second, more narrowly phrased, amendment does not go as far but seeks to confine the right to withdraw tax refunds from those who claim benefit. I ask the Committee to reject them.
The reason why refunds are to be deferred until the end of a strike is that that will align the treatment of strikers with that of the unemployed. Hon. Members have mentioned those who do not claim benefit. It is correct: that the rights of strikers should be broadly comparable with those of the unemployed.

Mr. Ennals: rose—

Mr. Brittan: I shall answer the right hon. Gentleman, but I am sure that he wishes to hear what I have to say first.
The majority of the unemployed claim that benefit and tax refunds will be withheld. In theory, it would be possible to withhold tax refunds only from strikers who are benefit claimants. However difficult it may be to accept, in practice that would be difficult to do if the group concerned were a minority. I do not accept that it is such a small minority as was suggested by the hon. Member for Edinburgh, Central (Mr. Cook), because his figures included short strikes. The more extended strikes are relevant because in a short strike a person probably would not be away from work long enough to qualify for a refund.

Mr. Ennals: The Minister did not answer my question. Perhaps I am a little stupid in not understanding. If the industrial dispute goes on after the tax year, does the striker receive his refund at the end of the tax year or does he have to wait until the end of the industrial dispute?

Mr. Brittan: As so often, one is reluctant to give way because one was about to speak about that subject. I shall answer that question. However, I should first say that if refunds are withheld only from strikers who claim benefit, the majority of strikers who do not claim benefit would be more favourably treated than the unemployed. I readily accept that that is the majority, although not the overwhelming majority as has been suggested. The relevant figure is about two-thirds. That is not a defensible proposition, and in the circumstances it is reasonable to withhold the refunds from strikers at large.
The right hon. Member for Norwich, North (Mr. Ennals) asked when the refund is to be made. We considered whether the same conditions should apply to strikers as to the unemployed—that a refund should be payable at the end of the tax year. We came to the conclusion that that is the right way to do it. We have decided that the right course in a trade dispute is for tax refunds to be withheld until the person has returned to work.
Essentially, there are two reasons. First, unemployment is likely to be a much longer experience for many people than going on strike. There are long strikes. We can all mention them, and we all have views about their rights and wrongs. But there is no doubt that in today's conditions unemployment usually lasts longer. Moreover, if tax refunds to strikers were made in the middle of a strike merely because the tax year had ended, that would be arbitrary action that could not be justified. It would be at random, and it would provide an unwarranted incentive for some disputes to continue.

Mr. Cryer: What will be the position of a single person, in receipt of no benefits, who is locked out in an industrial dispute, or as a consequence of an industrial dispute, because the production process has come to an end, but who is not on strike? Is he affected in exactly the same way as anyone who is directly on strike?

Mr. Brittan: The matter is governed by section 19 of the Social Security Act 1975, which provides
A person who has lost employment … by reason of a stoppage of work … due to a trade dispute at his place of employment
will be covered by this provision. But that statute also provides that that does not apply to those who are
not participating in … or directly interested in the trade dispute".
Exactly the same provision is being used for the purposes of the fiscal legislation.

Mr. Cook: One or two of my hon. Friends, particularly my hon. Friend the Member for Walsall, North (Mr. Winnick), asked why the striker should be treated differently in respect of how long he must wait for his refund compared with the unemployed person. As my hon. Friend pointed out, the striker apparently is to be kept waiting until the end of the strike, whereas the unemployed person will receive his refund at the end of the period of unemployment or at the end of the tax year if it intervenes.
Having listened to the Chief Secretary elaborate the view that there should be broad comparability between the treatment of the unemployed person and that of the striker, I should have expected him to accept my hon. Friend's contention that the striker should be on the same footing if the end of the tax year intervened. I entirely accept the Chief Secretary's point that the dates of the tax year are arbitrary, but we are familiar with the many occasions on which the end of the tax year and the start of a new one have that arbitrary effect.
We provide in the statute that at the end of the tax year the taxpayer is entitled to an adjustment, and, as part of that adjustment, if a rebate is due he is entitled to receive it. The clause sets aside the Inland Revenue's obligation to make that payment to one group of people who have been singled out for special treatment. We cannot repeat

too often how, throughout these clauses, those who are party to industrial disputes are singled out. They are treated on a different basis from the unemployed, a basis that is special to strikers. It is not surprising that some Opposition hon. Members have formed the view that that special treatment does not reflect any underlying principle, which would surely argue the same treatment for other groups, but is pure, petty vindictiveness towards those involved in a strike.
The clause does not say that the refund will be withheld until the end of the strike. We are advised that that will be its effect, because press notices have been issued. The press has been advised, even if it has not been included in the statute, that the regulations that will be laid under the clause will have that effect.
We have still to see those regulations, and we shall have an opportunity to debate that matter when we consider a later amendment. But we shall want to express the view that Parliament should see those regulations before we complete the Report stage so that we at least are privy to the consultation which is to take place about those regulations.
I see from the press notice that the consultation on the regulations will take place with "interested parties". I hope that a random sample of the unemployed and those on strike will be included among the interested parties, because some of the responses which the Chief Secretary may have to his consultation will be very interesting when they discover what is to be done to them.
The right hon. and learned Gentleman picked me up on my reference to the percentage of strikers who have claimed supplementary benefit. The Committee will remember my pointing out that in 1979 a marvellous total of 1·1 per cent. of all strikers received supplementary benefit; in other words, 98·9 per cent. of all strikers did not. The Chief Secretary said that I exaggerated, and that he would come down to a figure of 33 per cent., although we are not quite sure, who claimed and obtained supplementary benefit, leaving 66 per cent. who did not. The basis on which he did that was by concentrating on longer strikes.
As the Chief Secretary generously admitted, this is a matter of some speculation. For a start, it depends upon the definition of "longer strike" that is chosen. But let us waive any cavilling about how we define a long-term striker, and let us waive any speculation about whether the figure of one-third is too high or too low. Let us simply accept the figure. It leaves us with the conclusion that under the clause tax refunds will be withheld from 100 per cent. of those on strike, although on the right hon. and learned Gentleman's admission only 33 per cent. of them are receiving income which is taxable under the provisions of clause 27.
That is scandalous. It is shameful. It is imposing a new burden, a new loss of right on the other 66 per cent. who are not receiving taxable income. Under the clause they will have removed from them their right to have the tax refund in respect of the preceding month to which they have been entitled hitherto.
There are numbers of people who cannot claim supplementary benefit when on strike, even if they wish to do so. There are single people, who will be deprived of the sole source of income to which they have been entitled hitherto. The Chief Secretary said that the reason why they had to be deprived of that right and the reason why the 66


per cent. who were not claiming benefit would have their refunds withheld was to put them on the same footing as the unemployed.
With respect, that is not the case. Under paragraph (a), only the unemployed person who
has claimed unemployment benefit or a payment of supplementary allowance.
will be affected. In other words, there may be unemployed people who may not make a claim for unemployment benefit or supplementary allowance, and in those circumstances para (a) does not bite and they are entitled to their refunds. The Inland Revenue has no power under para (a) to withhold their refunds. But that will not be the case with a striker. The 66 per cent. who will not, or who cannot find their way through the regulations to claim their supplementary benefit will have their tax refunds withheld. The option is not extended to them in the way that it is to the unemployed.
If the Chief Secretary is anxious to put both classes on the same footing, in logic he is bound to accept amendment No. 31, which limits the scope of clause 29 to those who come within the scope of clause 27. But the Chief Secretary says that he will not do that and, to be honest, I do not expect him to. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said, the reality is that what we are discussing has nothing to do with tax policy. This proposal is not made out of any high consideration of fiscal policy, nor is it made out of any consideration of the necessity to raise revenue for the Government.
The measure is brought before us as part of a sustained programme by the Government to try to shift the bargaining strength from workers to management and to try to weaken the power of labour so as to strike a bargain with management. That is its purpose. It is part of the Government's policy to run up a large reserve army of unemployed people to undercut the bargaining strength of those who have managed to remain in work, even under this Government.
11.15 pm
We find the principle of such an approach repugnant. We find the tactics short-term and short-sighted. The Chief Secretary complained of the mood of bitterness ain this debate—a mood which reflects the bitterness outside the Committee. Nothing is more likely to encourage that bitterness than this type of tactic, which can only backfire on those who invented it. The Committee has a duty to try to protect the wives and children of strikers who will be denied refunds under the provision. Perhaps we should try, too, to protect the Chief Secretary from their anger by voting for amendment No. 30.

Question put, That the amendment be made: —

The Committee Divided: Ayes 216, Noes 275.

Division No. 176]
[10.18 pm


AYES


Abse, Leo
Ashton, Joe


Adams, Allen
Atkinson, N.(H'gey,)


Allaun, Frank
Bagier, Gordon A.T.


Alton, David
Barnett, Guy (Greenwich)


Anderson, Donald
Barnett, Rt Hon Joel (H'wd)


Archer, Rt Hon Peter
Benn, Rt Hon A. Wedgwood


Ashley, Rt Hon Jack
Bennett, Andrew(St'kp't N)






Bidwell, Sydney
Holland, S. (L'b'th, Vauxh'll)


Booth, Rt Hon Albert
Homewood, William


Boothroyd, Miss Betty
Hooley, Frank


Bray, Dr Jeremy
Horam, John


Brocklebank-Fowler, C.
Howell, Rt Hon D.


Brown, R. C. (N'castle W)
Howells, Geraint


Brown, Ron (E'burgh, Leith)
Hudson Davies, Gwilym E.


Buchan, Norman
Hughes, Mark (Durham)


Callaghan, Rt Hon J.
Hughes, Robert (Aberdeen N)


Callaghan, Jim (Midd't'n &amp; P)
Hughes, Roy (Newport)


Campbell, Ian
Janner, Hon Greville


Campbell-Savours, Dale
Jay, Rt Hon Douglas


Canavan, Dennis
John, Brynmor


Cant, R. B.
Johnson, James (Hull West)


Carmichael, Neil
Johnston, Russell (Inverness)


Carter-Jones, Lewis
Jones, Rt Hon Alec (Rh'dda)


Clark, Dr David (S Shields)
Jones, Barry (East Flint)


Cocks, Rt Hon M. (B'stol S)
Jones, Dan (Burnley)


Concannon, Rt Hon J. D.
Kaufman, Rt Hon Gerald


Cook, Robin F.
Kerr, Russell


Cowans, Harry
Kilroy-Silk, Robert


Craigen, J. M.
Kinnock, Neil


Crowther, J. S.
Lambie, David


Cryer, Bob
Lamborn, Harry


Cunliffe, Lawrence
Leadbitter, Ted


Cunningham, G. (Islington S)
Leighton, Ronald


Cunningham, Dr J. (W'h'n)
Lestor, Miss Joan


Dalyell, Tam
Lewis, Arthur (N'ham NW)


Davidson, Arthur
Litherland, Robert


Davies, Ifor (Gower)
Lyon, Alexander (York)


Davis, Clinton (Hackney C)
Lyons, Edward (Bradf'd W)


Davis, T. (B'ham, Stechf'd)
Mabon, Rt Hon Dr J. Dickson


Deakins, Eric
McCartney, Hugh


Dean, Joseph (Leeds West)
McElhone, Frank


Dempsey, James
McKelvey, William


Dewar, Donald
MacKenzie, Rt Hon Gregor
 
Dixon, Donald
McMahon, Andrew


Dobson, Frank
McNally, Thomas


Dormand, Jack
McNamara, Kevin


Douglas-Mann, Bruce
McWilliam, John


Dubs, Alfred
Magee, Bryan


Duffy, A. E. P.
Marks, Kenneth


Dunn, James A.
Marshall, D(G'gow S'ton)


Dunnett, Jack
Marshall, Dr Edmund (Goole)


Dunwoody, Hon Mrs G.
Marshall, Jim (Leicester S)


Eadie, Alex
Martin, M(G'gow S'burn)


Eastham, Ken
Mason, Rt Hon Roy


Ellis, R. (NE D'bysh're)
Maxton, John


English, Michael
Maynard, Miss Joan


Ennals, Rt Hon David
Mellish, Rt Hon Robert


Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Ewing, Harry
Mitchell, Austin (Grimsby)


Faulds, Andrew
Mitchell, R. C. (Soton Itchen)


Field, Frank
Morris, Rt Hon A. (W'shawe)


Fitch, Alan
Morris, Rt Hon C. (O'shaw)


Flannery, Martin
Morris, Rt Hon J. (Aberavon)


Fletcher, Ted (Darlington)
Morton, George


Foot, Rt Hon Michael
Newens, Stanley


Ford, Ben
Oakes, Rt Hon Gordon


Forrester, John
Ogden, Eric


Foster, Derek
O'Halloran, Michael


Fraser, J. (Lamb'th, N'w'd)
O'Neill, Martin


Freeson, Rt Hon Reginald
Orme, Rt Hon Stanley


Garrett, John (Norwich S)
Palmer, Arthur


George, Bruce
Parry, Robert


Gilbert, Rt Hon Dr John
Prescott, John


Ginsburg, David
Price, C. (Lewisham W)


Graham, Ted
Race, Reg


Grant, George (Morpeth)
Radice, Giles


Grimond, Rt Hon J.
Rees, Rt Hon M (Leeds S)


Hamilton, James (Bothwell)
Richardson, Jo


Hamilton, W. W. (C'tral Fife)
Roberts, Albert (Normanton)


Harrison, Rt Hon Walter
Roberts, Allan (Bootle)


Hart, Rt Hon Dame Judith
Roberts, Ernest (Hackney N)


Hattersley, Rt Hon Roy
Roberts, Gwilym (Cannock)


Haynes, Frank
Robertson, George


Healey, Rt Hon Denis
Robinson, G. (Coventry NW)


Heffer, Eric S.
Rooker, J. W.


Hogg, N. (E Dunb't'nshire)
Ross, Ernest (Dundee West)





Ross, Stephen (Isle of Wight)
Tinn, James


Rowlands, Ted
Torney, Tom


Ryman, John
Wainwright, E.(Dearne V)


Sever, John
Wainwright, R.(Colne V)


Sheerman, Barry
Walker, Rt Hon H.(D'caster)


Sheldon, Rt Hon R.
Watkins, David


Shore, Rt Hon Peter
Weetch, Ken


Short, Mrs Renée
Wellbeloved, James


Silkin, Rt Hon J. (Deptford)
Welsh, Michael


Silkin, Rt Hon S. C. (Dulwich)
White, Frank R.


Skinner, Dennis
White, J. (G'gow Pollok)


Smith, Rt Hon J. (N Lanark)
Whitlock, William


Snape, Peter
Wigley, Dafydd


Soley, Clive
Willey, Rt Hon Frederick


Spearing, Nigel
Williams, Rt Hon A.(S'sea W)


Spriggs, Leslie
Wilson, Rt Hon Sir H.(H'ton)


Stallard, A. W.
Wilson, William (C'try SE)


Stewart, Rt Hon D. (W Isles)
Winnick, David


Stoddart, David
Woodall, Alec


Stott, Roger
Woolmer, Kenneth


Straw, Jack
Wright, Sheila


Summerskill, Hon Dr Shirley
Young, David (Bolton E)


Thomas, Dafydd (Merioneth)



Thomas, Jeffrey (Abertillery)
Tellers for the Ayes:


Thomas, Dr R.(Carmarthen)
Mr. Donald Coleman and Mr. Allen McKay.


Thorne, Stan (Preston South)



Tilley, John





NOES


Adley, Robert
Cockeram, Eric


Aitken, Jonathan
Colvin, Michael


Alexander, Richard
Cope, John


Alison, Michael
Corrie, John


Amery, Rt Hon Julian
Cranborne, Viscount


Ancram, Michael
Critchley, Julian


Aspinwall, Jack
Crouch, David


Atkins, Robert(Preston N)
Dean, Paul (North Somerset)


Baker, Kenneth(St.M'bone)
Dickens, Geoffrey


Baker, Nicholas (N Dorset)
Dorrell, Stephen


Banks, Robert
Dover, Denshore


Bell, Sir Ronald
du Cann, Rt Hon Edward


Bendall, Vivian
Dunn, Robert (Dartford)


Benyon, Thomas (A'don)
Dykes, Hugh


Benyon, W. (Buckingham)
Eden, Rt Hon Sir John


Berry, Hon Anthony
Edwards, Rt Hon N. (P'broke)


Best, Keith
Eggar, Tim


Bevan, David Gilroy
Elliott, Sir William


Biggs-Davison, John
Emery, Peter


Blackburn, John
Eyre, Reginald


Blaker, Peter
Fairgrieve, Russell


Body, Richard
Faith, Mrs Sheila


Bonsor, Sir Nicholas
Fell, Anthony


Boscawen, Hon Robert
Fenner, Mrs Peggy


Boyson, Dr Rhodes
Fisher, Sir Nigel


Braine, Sir Bernard
Fletcher, A. (Ed'nb'gh N)


Bright, Graham
Fletcher-Cooke, Sir Charles


Brinton, Tim
Fookes, Miss Janet


Brittan, Leon
Forman, Nigel


Brooke, Hon Peter
Fowler, Rt Hon Norman


Brotherton, Michael
Fox, Marcus


Brown, Michael(Brigg &amp; Sc'n)
Fraser, Rt Hon Sir Hugh


Browne, John (Winchester)
Fraser, Peter (South Angus)


Bruce-Gardyne, John
Fry, Peter


Bryan, Sir Paul
Gardiner, George (Reigate)


Buchanan-Smith, Alick
Gardner, Edward (S Fylde)


Buck, Antony
Garel-Jones, Tristan


Budgen, Nick
Gilmour, Rt Hon Sir Ian


Bulmer, Esmond
Glyn, Dr Alan


Burden, Sir Frederick
Goodlad, Alastair


Butcher, John
Gow, Ian


Cadbury, Jocelyn
Gower, Sir Raymond


Carlisle, John (Luton West)
Gray, Hamish


Carlisle, Kenneth (Lincoln)
Greenway, Harry


Carlisle, Rt Hon M. (R'c'n)
Griffiths, E.(B'y St. Edm'ds)


Chalker, Mrs. Lynda
Griffiths, Peter Portsm'th N)


Churchill, W. S.
Grist, Ian


Clark, Hon A. (Plym'th, S'n)
Grylls, Michael


Clark, Sir W. (Croydon S)
Hamilton, Hon A.


Clarke, Kenneth (Rushcliffe)
Hamilton, Michael (Salisbury)


Clegg, Sir Walter
Hampson, Dr Keith






Hannam, John
McNair-Wilson, P. (New F'st)


Haselhurst, Alan
McQuarrie, Albert


Hastings, Stephen
Madel, David


Hawksley, Warren
Major, John


Hayhoe, Barney
Marland, Paul


Heddle, John
Marlow, Tony


Henderson, Barry
Marshall, Michael (Arundel)


Heseltine, Rt Hon Michael
Maude, Rt Hon Sir Angus


Hicks, Robert
Mawby, Ray


Higgins, Rt Hon Terence L
Mawhinney, Dr Brian


Holland, Philip (Carlton)
Maxwell-Hyslop, Robin


Hooson, Tom
Mayhew, Patrick


Hordern, Peter
Mellor, David


Howell, Rt Hon D. (G'ldf'd)
Meyer, Sir Anthony


Hunt, David (Wirral)
Miller, Hal (B'grove)


Hunt, John (Ravensbourne)
Mills, lain (Meriden)


Hurd, Hon Douglas
Mills, Peter (West Devon)


Jenkin, Rt Hon Patrick
Miscampbell, Norman


Johnson Smith, Geoffrey
Moate, Roger


Jopling, Rt Hon Michael
Molyneaux, James


Kaberry, Sir Donald
Monro, Hector


Kellett-Bowman, Mrs Elaine
Montgomery, Fergus


Kimball, Marcus
Moore, John


King, Rt Hon Tom
Morris, M. (N'hampton S)


Kitson, Sir Timothy
Morrison, Hon C. (Devizes)


Knox, David
Morrison, Hon P. (Chester)


Lamont, Norman
Mudd, David


Lang, Ian
Murphy, Christopher


Langford-Holt, Sir John
Myles, David


Latham, Michael
Neale, Gerrard


Lawrence, Ivan
Needham, Richard


Lawson, Rt Hon Nigel
Nelson, Anthony


Lee, John
Neubert, Michael


Le Marchant, Spencer
Newton, Tony


Lennox-Boyd, Hon Mark
Normanton, Tom


Lloyd, Ian (Havant &amp; W'loo)
Onslow, Cranley


Lloyd, Peter (Fareham)
Page, Rt Hon Sir G. (Crosby)


Loveridge, John
Page, Richard (SW Herts)


Luce, Richard
Parkinson, Cecil


Lyell, Nicholas
Parris, Matthew


McCrindle, Robert
Patten, Christopher (Bath)


Macfarlane, Neil
Patten, John (Oxford)


MacGregor, John
Pattie, Geoffrey


MacKay, John (Argyll)
Pawsey, James


Macmillan, Rt Hon M.
Peyton, Rt Hon John


McNair-Wilson, M. (N'bury)
Pink, R. Bonner




Porter, Barry
Stokes, John


Powell, Rt Hon J.E. (S Down)
Stradling Thomas, J.


Prentice, Rt Hon Reg
Tapsell, Peter


Price, Sir David (Eastleigh)
Taylor, Robert (Croydon NW)


Prior, Rt Hon James
Taylor, Teddy (S'end E)


Proctor, K. Harvey
Tebbit, Norman


Pym, Rt Hon Francis
Temple-Morris, Peter


Raison, Timothy
Thomas, Rt Hon Peter


Rathbone, Tim
Thompson, Donald


Rees-Davies, W. R.
Thorne, Neil (Ilord South)


Renton, Tim
Thornton, Malcolm


Rhodes James, Robert
Townend, John (Bridlington)


Rhys Williams, Sir Brandon
Trippier, David


Ridley, Hon Nicholas
Trotter, Neville


Ridsdale, Sir Julian
van Straubenzee, W. R.


Rifkind, Malcolm
Vaughan, Dr Gerard


Rippon, Rt Hon Geoffrey
Viggers, Peter


Roberts, M. (Cardiff NW)
Waddington, David


Roberts, Wyn (Conway)
Wakeham, John


Rossi, Hugh
Waldegrave, Hon William


Rost, Peter
Walker, B. (Perth)


Royle, Sir Anthony
Walker-Smith, Rt Hon Sir D.


Sainsbury, Hon Timothy
Wall, Patrick


Scott, Nicholas
Waller, Gary


Shaw, Michael (Scarborough)
Walters, Dennis


Shelton, William (Streatham)
Ward, John


Shepherd, Colin (Hereford)
Warren, Kenneth


Shepherd, Richard
Watson, John


Shersby, Michael
Wells, John (Maidstone)


Silvester, Fred
Wells, Bowen


Sims, Roger
Wheeler, John


Skeet, T. H. H.
Whitelaw, Rt Hon William


Speed, Keith
Whitney, Raymond


Speller, Tony
Wickenden, Keith


Spicer, Jim (West Dorset)
Williams, D.(Montgomery)


Spicer, Michael (S Worcs)
Winterton, Nicholas


Sproat, Iain
Wolfson, Mark


Squire, Robin
Young, Sir George (Acton)


Stanbrook, Ivor
Younger, Rt Hon George


Stanley, John



Steen, Anthony
Tellers for the Noes:


Stevens, Martin
Mr. Carol Mather and Lord James Douglas-


Stewart, Ian (Hitchin)



Stewart, A.(E Renfrewshire)
Hamilton.

Division No. 177]
[11.16 pm


AYES


Abse, Leo
Bennett, Andrew (St'kp't N)


Adams, Allen
Bidwell, Sydney


Allaun, Frank
Booth, Rt Hon Albert


Alton, David
Boothroyd, Miss Betty


Anderson, Donald
Bray, Dr Jeremy


Archer, Rt Hon Peter
Brown, R. C. (N'castle W)


Ashley, Rt Hon Jack
Brown, Ron (E'burgh, Leith)


Ashton, Joe
Buchan, Norman


Atkinson, N.(H'gey,)
Callaghan, Rt Hon J.


Bagier, Gordon A.T.
Callaghan, Jim (Midd't'n &amp; P)


Barnett, Guy (Greenwich)
Campbell, Ian


Barnett, Rt Hon Joel (H'wd)
Campbell-Savours, Dale


Benn, Rt Hon A. Wedgwood
Canavan, Dennis





Cant, R. B.
Johnston, Russell (Inverness)


Carmichael, Neil
Jones, Rt Hon Alec (Rh'dda)


Carter-Jones, Lewis
Jones, Barry (East Flint)


Clark, Dr David (S Shields)
Jones, Dan (Burnley)


Cocks, Rt Hon M. (B'stol S)
Kaufman, Rt Hon Gerald


Coleman, Donald
Kerr, Russell


Concannon, Rt Hon J. D.
Kilroy-Silk, Robert


Conlan, Bernard
Kinnock, Neil


Cook, Robin F.
Lambie, David


Cowans, Harry
Leadbitter, Ted


Craigen, J. M.
Leighton, Ronald


Crowther, J. S.
Lestor, Miss Joan


Cryer, Bob
Lewis, Arthur (N'ham NW)


Cunliffe, Lawrence
Litherland, Robert


Cunningham, G. (Islington S)
Lyon, Alexander (York)


Cunningham, Dr J. (W'h'n)
McCartney, Hugh


Dalyell, Tam
McElhone, Frank


Davidson, Arthur
McKay, Allen (Penistone)


Davies, Rt Hon Denzil (L'lli)
McKelvey, William


Davies, Ifor (Gower)
MacKenzie, Rt Hon Gregor


Davis, Clinton (Hackney C)
McNally, Thomas


Davis, T. (B'ham, Stechf'd)
McNamara, Kevin


Deakins, Eric
McWilliam, John


Dempsey, James
Magee, Bryan


Dewar, Donald
Marks, Kenneth


Dixon, Donald
Marshall, D(G'gow S'ton)


Dobson, Frank
Marshall, Dr Edmund (Goole)


Dormand, Jack
Marshall, Jim (Leicester S)


Douglas-Mann, Bruce
Martin, M(G'gow S'burn)


Dubs, Alfred
Mason, Rt Hon Roy


Duffy, A. E. P.
Maxton, John


Dunn, James A.
Maynard, Miss Joan


Dunnett, Jack
Meacher, Michael


Dunwoody, Hon Mrs G.
Mikardo, Ian


Eadie, Alex
Millan, Rt Hon Bruce


Eastham, Ken
Mitchell, Austin (Grimsby)


Ellis, R. (NE D'bysh're)
Mitchell, R. C. (Soton Itchen)


English, Michael
Morris, Rt Hon A. (W'shawe)


Ennals, Rt Hon David
Morris, Rt Hon C. (O'shaw)


Evans, Ioan (Aberdare)
Morris, Rt Hon J. (Aberavon)


Evans, John (Newton)
Morton, George


Ewing, Harry
Newens, Stanley


Faulds, Andrew
Oakes, Rt Hon Gordon


Field, Frank
Ogden, Eric


Fitch, Alan
O'Halloran, Michael


Flannery, Martin
O'Neill, Martin


Fletcher, Ted (Darlington)
Orme, Rt Hon Stanley


Foot, Rt Hon Michael
Palmer, Arthur


Ford, Ben
Parry, Robert


Forrester, John
Prescott, John


Foster, Derek
Price, C. (Lewisham W)


Fraser, J. (Lamb'th, N'w'd)
Race, Reg


Freeson, Rt Hon Reginald
Radice, Giles


Freud, Clement
Rees, Rt Hon M (Leeds S)


Garrett, John (Norwich S)
Richardson, Jo


George, Bruce
Roberts, Albert (Normanton)


Gilbert, Rt Hon Dr John
Roberts, Allan (Bootle)


Ginsburg, David
Roberts, Ernest (Hackney N)


Graham, Ted
Roberts, Gwilym (Cannock)


Grant, George (Morpeth)
Robertson, George


Hamilton, James (Bothwell)
Robinson, G. (Coventry NW)


Hamilton, W. W. (C'tral Fife)
Rooker, J. W.


Harrison, Rt Hon Walter
Ross, Stephen (Isle of Wight)


Hart, Rt Hon Dame Judith
Rowlands, Ted


Healey, Rt Hon Denis
Ryman, John


Heffer, Eric S.
Sever, John


Hogg, N. (E Dunb't'nshire)
Sheerman, Barry


Holland, S. (L'b'th, Vauxh'll)
Sheldon, Rt Hon R.


Homewood, William
Shore, Rt Hon Peter


Hooley, Frank
Short, Mrs Renée


Howell, Rt Hon D.
Silkin, Rt Hon J. (Deptford)


Howells, Geraint
Skinner, Dennis


Hudson Davies, Gwilym E.
Smith, Rt Hon J. (N Lanark)


Hughes, Mark (Durham)
Snape, Peter


Hughes, Robert (Aberdeen N)
Soley, Clive


Hughes, Roy (Newport)
Spearing, Nigel


Janner, Hon Greville
Spriggs, Leslie


Jay, Rt Hon Douglas
Stallard, A. W.


John, Brynmor
Steel, Rt Hon David


Johnson, James (Hull West)
Stewart, Rt Hon D. (W Isles)






Stoddart, David
Welsh, Michael


Stott, Roger
White, Frank R.


Straw, Jack
White, J. (G'gow Pollok)


Summerskill, Hon Dr Shirley
Whitlock, William


Thomas, Dafydd (Merioneth)
Wigley, Dafydd


Thomas, Jeffrey (Abertillery)
Williams, Rt Hon A.(S'sea W)


Thomas, Dr R.(Carmarthen)
Wilson, Rt Hon Sir H.(H'ton)


Thorne, Stan (Preston South)
Wilson, William (C'try SE)


Tilley, John
Winnick, David


Tinn, James
Woodall, Alec


Torney, Tom
Woolmer, Kenneth


Wainwright, E.(Dearne V)
Wright, Sheila


Wainwright, R.(Colne V)
Young, David (Bolton E)


Walker, Rt Hon H.(D'caster)



Watkins, David
Tellers for the Ayes:


Weetch, Ken
Mr. Joseph Dean and Mr. Frank Haynes.


Wellbeloved, James





NOES


Adley, Robert
Dunn, Robert (Dartford)


Aitken, Jonathan
Dykes, Hugh


Alexander, Richard
Eden, Rt Hon Sir John


Alison, Michael
Edwards, Rt Hon N. (P'broke)


Amery, Rt Hon Julian
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Aspinwall, Jack
Emery, Peter


Atkins, Robert(Preston N)
Eyre, Reginald


Baker, Kenneth (St.M'bone)
Fairgrieve, Russell


Baker, Nicholas (N Dorset)
Faith, Mrs Sheila


Banks, Robert
Fell, Anthony


Bendall, Vivian
Fenner, Mrs Peggy


Benyon, Thomas (A'don)
Fisher, Sir Nigel


Benyon, W. (Buckingham)
Fletcher, A. (Ed'nb'gh N)


Berry, Hon Anthony
Fletcher-Cooke, Sir Charles


Best, Keith
Fookes, Miss Janet


Bevan, David Gilroy
Forman, Nigel


Biggs-Davison, John
Fowler, Rt Hon Norman


Blackburn, John
Fox, Marcus


Blaker, Peter
Fraser, Peter (South Angus)


Body, Richard
Gardiner, George (Reigate)


Bonsor, Sir Nicholas
Gardner, Edward (S Fylde)


Boscawen, Hon Robert
Garel-Jones, Tristan


Boyson, Dr Rhodes
Gilmour, Rt Hon Sir Ian


Braine, Sir Bernard
Glyn, Dr Alan


Bright, Graham
Goodlad, Alastair


Brinton, Tim
Gow, Ian


Brittan, Leon
Gower, Sir Raymond


Brotherton, Michael
Gray, Hamish


Brown, Michael(Brigg &amp; Sc'n)
Greenway, Harry


Browne, John (Winchester)
Griffiths, E.(B'y St. Edm'ds)


Bruce-Gardyne, John
Griffiths, Peter Portsm'th N)


Bryan, Sir Paul
Grist, Ian


Buchanan-Smith, Alick
Grylls, Michael


Buck, Antony
Hamilton, Hon A.


Budgen, Nick
Hamilton, Michael (Salisbury)


Bulmer, Esmond
Hampson, Dr Keith


Burden, Sir Frederick
Hannam, John


Butcher, John
Haselhurst, Alan


Cadbury, Jocelyn
Hastings, Stephen


Carlisle, John (Luton West)
Hawksley, Warren


Carlisle, Kenneth (Lincoln)
Hayhoe, Barney


Carlisle, Rt Hon M. (R'c'n )
Heddle, John


Chalker, Mrs. Lynda
Henderson, Barry


Channon, Rt. Hon. Paul
Heseltine, Rt Hon Michael


Churchill, W. S.
Hicks, Robert


Clark, Hon A. (Plym'th, S'n)
Higgins, Rt Hon Terence L.


Clark, Sir W. (Croydon S)
Holland, Philip (Carlton)


Clarke, Kenneth (Rushcliffe)
Hooson, Tom


Clegg, Sir Walter
Hordern, Peter


Cockeram, Eric
Howell, Rt Hon D. (G'ldf'd)


Colvin, Michael
Hunt, David (Wirral)


Cope, John
Hunt, John (Ravensbourne)


Corrie, John
Hurd, Hon Douglas


Cranborne, Viscount
Jenkin, Rt Hon Patrick


Crouch, David
Johnson Smith, Geoffrey


Dean, Paul (North Somerset)
Jopling, Rt Hon Michael


Dickens, Geoffrey
Kaberry, Sir Donald


Dorrell, Stephen
Kellett-Bowman, Mrs Elaine


Dover, Denshore
Kimball, Marcus


du Cann, Rt Hon Edward
King, Rt Hon Tom





Kitson, Sir Timothy
Rees-Davies, W. R.


Knox, David
Renton, Tim


Lamont, Norman
Rhodes James, Robert


Lang, Ian
Rhys Williams, Sir Brandon


Langford-Holt, Sir John
Ridley, Hon Nicholas


Latham, Michael
Ridsdale, Sir Julian


Lawrence, Ivan
Rifkind, Malcolm


Lawson, Rt Hon Nigel
Rippon, Rt Hon Geoffrey


Lee, John
Roberts, M. (Cardiff NW)


Le Marchant, Spencer
Roberts, Wyn (Conway)


Lennox-Boyd, Hon Mark
Rossi, Hugh


Lloyd, Ian (Havant &amp; W'loo)
Rost, Peter


Lloyd, Peter (Fareham)
Royle, Sir Anthony


Loveridge, John
Sainsbury, Hon Timothy


Luce, Richard
Scott, Nicholas


Lyell, Nicholas
Shaw, Giles (Pudsey)


McCrindle, Robert
Shaw, Michael (Scarborough)


Macfarlane, Neil
Shelton, William (Streatham)


MacGregor, John
Shepherd, Colin (Hereford)


MacKay, John (Argyll)
Shepherd, Richard


Macmillan, Rt Hon M.
Shersby, Michael


McNair-Wilson, M. (N'bury)
Silvester, Fred


McNair-Wilson, P. (New F'st)
Sims, Roger


McQuarrie, Albert
Skeet, T. H. H.


Madel, David
Speed, Keith


Major, John
Speller, Tony


Marks, Kenneth
Spicer, Jim (West Dorset)


Marland, Paul
Spicer, Michael (S Worcs)


Marlow, Tony
Sproat, Iain


Marshall, Michael (Arundel)
Squire, Robin


Mather, Carol
Stanbrook, Ivor


Maude, Rt Hon Sir Angus
Stanley, John


Mawby, Ray
Steen, Anthony


Mawhinney, Dr Brian
Stevens, Martin


Maxwell-Hyslop, Robin
Stewart, Ian (Hitchin)


Mayhew, Patrick
Stewart, A.(E Renfrewshire)


Mellor, David
Stokes, John


Meyer, Sir Anthony
Stradling Thomas, J.


Miller, Hal (B'grove)
Tapsell, Peter


Mills, Iain (Meriden)
Taylor, Robert (Croydon NW)


Mills, Peter (West Devon)
Taylor, Teddy (S'end E)


Miscampbell, Norman
Tebbit, Norman


Moate, Roger
Temple-Morris, Peter


Molyneaux, James
Thomas, Rt Hon Peter


Monro, Hector
Thompson, Donald


Montgomery, Fergus
Thorne, Neil (Ilford South)


Moore, John
Thornton, Malcolm


Morris, M. (N'hampton S)
Townend, John (Bridlington)


Morrison, Hon C. (Devizes)
Trippier, David


Morrison, Hon P. (Chester)
Trotter, Neville


Mudd, David
van Straubenzee, W. R.


Murphy, Christopher
Vaughan, Dr Gerard


Myles, David
Viggers, Peter


Neale, Gerrard
Waddington, David


Needham, Richard
Wakeham,John


Nelson, Anthony
Waldegrave, Hon William


Neubert, Michael
Walker, B. (Perth)


Newton, Tony
Walker-Smith, Rt Hon Sir D.


Normanton, Tom
Wall, Patrick


Onslow, Cranley
Waller, Gary


Page, Rt Hon Sir G. (Crosby)
Walters, Dennis


Page, Richard (SW Herts)
Ward, John


Parkinson, Cecil
Warren, Kenneth


Parris, Matthew
Watson, John


Patten, Christopher (Bath)
Wells, John (Maidstone)


Patten, John (Oxford)
Wells, Bowen


Pattie, Geoffrey
Wheeler, John


Pawsey, James
Whitelaw, Rt Hon William


Peyton, Rt Hon John
Whitney, Raymond


Pink, R. Bonner
Wickenden, Keith


Porter, Barry
Williams, D.(Montgomery)


Powell, Rt Hon J.E. (S Down)
Winterton, Nicholas


Price, Sir David (Eastleigh)
Wolfson, Mark


Prior, Rt Hon James
Young, Sir George (Acton)


Proctor, K. Harvey
Younger, Rt Hon George


Pym, Rt Hon Francis



Raison, Timothy
Tellers for the Noes:


Rathbone, Tim
Lord James Douglas-Hamilton and Mr. Peter Brooke.


Rees, Peter (Dover and Deal)

Question accordingly negatived

Mr. Robert Sheldon: I beg to move amendment No. 32, in page 19, line 5, after 'regulations', insert
'which, without prejudice to the generality of section 204 of the Income and Corporation Taxes Act 1970, shall be subject to an affirmative resolution of the House of Commons'.
Under the clause, regulations can be introduced dealing with the details of how refunds to strikers will not be made. The regulations will deal with the withholding of taxpayers' money, as we have discussed in previous debates. The unemployed will lose a certain amount of income but will gain something from the benefit side of the equation. The strikers will gain nothing. That is a penal use of taxation. Strikers will lose their refunds when they need their money most. Their commitments do not usually stop when their income stops. Their income will not increase again until they return to work and can pay for the continuing commitments.
Those matters have been the subject of discussion during the day. We are now debating whether the regulations should be made in an affirmative or negative manner. They should be the subject of a schedule so that they can be properly discussed and examined. We shall require to have a much closer understanding of the regulations. If they are not in final form, we shall need to share in some of the thinking that will lie behind them. That will be necessary before we accept this part of the legislation in Standing Committee. There will be plenty of time for debate at that stage.

Mr. Cryer: The amendment adds the requirement that the regulations under the clause shall be made by affirmative resolution rather than by the negative procedure, which I assume is that involved in the legislation mentioned in section 204 of the Taxes Act.
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) has mentioned the onerous nature of the proposed legislation—namely, that the unemployed will not have their tax rebates returned to them as at present. Strikers are placed in a much worse position than others. Contrary to the claims of many of the daily newspapers which play a subservient role to Conservative Central Office, they receive no benefit. Therefore, there will be some who will be dependent entirely on tax rebates for any form of sustenance. Single persons will have no other income. They have no dependants and there will be no income to share. They will be devoid of income.
The governing of payment is to be laid down in regulation. It would be far more desirable if the method of payment were laid down in a schedule to the Bill. Parliament's function is to pass primary legislation. The clause contains such important and unusual provisions, including an element of punitive legislation against strikers, that the matter should not be left to regulations.
Where the House of Commons agrees to regulations —as we know, the Government have a majority and they can get the clause through the House—it should insist that they are subject to the affirmative procedure and not the negative procedure. I hope that the Minister will assure us that the Government will undertake that procedure.
Workpeople have the strength to equal the power of the employer only through combination. Workpeople do not want to go on strike, because that is an action that involves sacrifices. However, they are sometimes faced with no

alternative if they are to obtain negotiating rights or a proper understanding of reasonable wage or working conditions claims. Therefore, it is important that this attack on strikers is dealt with by Parliament. It should not be managed by the antique backstairs method of delegated legislation that is undertaken by the House of Commons.
Far too much of our legislation is subject to the negative procedure. We all know that if a prayer is set down against a statutory instrument it is rarely, if ever, debated unless it is supported by the Front Bench. Only one and a half hours is available in any case, and, whichever procedure is used, instruments cannot be changed. That is most unsatisfactory: one must have the instrument or nothing.
Therefore, the proposal for the affirmative procedure is a democratic improvement. Whether one agrees with clause 29 or not, even some Conservative Members might just conceivably have a vague aspiration towards sustaining the democratic processes. In that case, they might have considered the general desirability of using the affirmative rather than the negative procedure wherever possible.
To us, the powers in clause 29 are particularly onerous. They are an attack on the unemployed and on strikers. We know that that is what the Government are about, that they do not much care about the unemployed, that they do not mind burdening them and that they are only too delighted to attack strikers. But the amendment is not about he merits of the clause—[Interruption.] I understand that the hon. Member has difficulty in stretching his mind this far, but if he could devote lengthy study to reading the clause he would see that it affects both categories.
Apart from the merits of these powers, the amendment seeks simply to give the House a better opportunity of debating the method of implementing it. That is a reasonable aspiration for both the Opposition and for Conservative Members who want to improve our debating procedures and make this place more accountable. We are asking the Government to ensure that democratic procedures are adhered to, and I hope that the Minister will respond.

Mr. Brittan: It is always a matter for judgment whether regulations under an Act of Parliament should be subject to the affirmative or the negative resolution procedure. Without wishing to sound cynical or cavilling, I would say that it is natural that the Opposition, who challenge the basis of this legislation, should be more prone to favour the affirmative procedure. However, in this case, there is good reason for the negative procedure.
Clause 29 clarifies and supplements the powers to make regulations under section 204 of the Taxes Act, so that regulations can be made providing for tax refunds to be withheld from benefit claimants during unemployment and from strikers. Section 204 is the enabling legislation which provides for regulations to be made for the operation of the PAYE system. When it was enacted, Parliament decided that the powers exercisable under it should be subject to the negative resolution procedure. Therefore, I find it difficult to see why, in relation to broadly similar regulations extending them under clause 29, a different procedure should be adopted. It is for that reason that I cannot commend the amendment to the Committee.

Amendment negatived.

Question put and agreed to.

Clause 29 ordered to stand part of the Bill.

To report Progress and ask leave to sit again tomorrow.—[Mr. Brittan.]

Committee report Progress; to sit again tomorrow.

Orders of the Day — Local Loans

The Financial Secretary to the Treasury (Mr. Nigel Lawson): I beg to move,
That the draft Local Loans (Increase of Limit) Order 1981, which was laid before this House on 16 April, be approved.
After the tranquil waters of the Finance Bill, we now move on to the highly controversial and electrifying subject of the Local Loans (Increase of Limit) Order 1981.
The order increases by £3,000 million the amount available for lending to local and other eligible authorities by the Public Works Loan Commissioners. The Finance Act 1978, which was passed by the Labour Government, increased the lending powers of the commissioners by £12,000 million, that sum to be made available in tranches of £3,000 million, each tranche after the first requiring an order subject to affirmative resolution. This is the second of those tranches requiring an order. It is the third of the four tranches altogether.
I hasten to reassure my hon. Friends that the order does not sanction any increase in local authority capital expenditure, which is controlled by the Government by other means. The order, therefore, does not affect public expenditure in the slightest, nor does it affect the amount which local authorities may borrow from the commissioners, which is fixed by quotas which are related to their agreed capital expenditure. The impact on the PSBR is wholly neutral as regards borrowing from the market or from the commissioners. Either source of borrowing has the same effect on the total of the PSBR. The purpose of the order is to give the House an opportunity to debate the matter.
The commissioners still have about £1,333 million, which is nearly 45 per cent. of the £3,000 million which was made available to them under the 1980 order. That is a sizeable sum. However, under the arrangements for access to the commissioners, the local authorities can draw 45 per cent. of the 1981–82 quota between 1 April last and the end of June. That amounts to about £1,600 million. While that it is only an entitlement and while, so far since 1 April only £21 million of it has been drawn, it is obviously necessary for the Government to have the legislative authority to fulfil that commitment. That makes it prudent for us to seek the additional tranche tonight.
Hon. Members will be aware of the important role played by the commissioners in providing local government with finance at virtually the rates at which the Government borrow, which cuts down costs for local government and assists local authorities to maintain adequate debt maturity.
The Government consider that it is in the interests of local authorities, individually and collectively, and of monetary policy, that progress should be made in lengthening the residual maturity of local authority debt. To help local authorities achieve that end, the Government have extended that facility for privileged borrowing in a number of ways.
Firstly, there has been a reallocation of the lapsed 1980–81 quotas. Secondly, we have continued the 1981–82 quotas at the level prevailing in 1980–81, that is to say, 50 per cent. of approved capital expenditure plus 4 per cent. of outstanding long-term debt, with a minimum entitlement of £5 million. Thirdly, we have continued to


allow authorities with a borrowing requirement of up to £5 million in 1981–82 to draw the whole amount from the commissioners.
Finally, I am sure that the whole House will join me in expressing thanks to the Public Works Loan Commissioners for the services that they render with such skill and dedication and entirely on a voluntary basis.

Mr. Jack Straw: We are pleased that the Financial Secretary has come to the House to increase the Public Works Loan Board's borrowing powers by no less then £3,000 million so soon after the substantial Labour gains in the county council elections, not only in metropolitan counties but also in what were previously Conservative strongholds such as Lancashire, Cheshire, Humberside and Avon. I hope that this means that they will respect the decision of an electorate which voted in large numbers for Labour councillors, who are committed to restoring many of the public expenditure cuts imposed by Conservative councils.

Mr. R. B. Cant: Would my hon. Friend add to his short list of Labour-controlled authorities the shire county of Staffordshire, in which the Tories were unexpectedly but totally routed?

Mr. Straw: I am glad that my hon. Friend reminds us of the great triumph in Staffordshire, with which he was associated. He has a long-standing association with Staffordshire. It is a long list and I referred only to some of the major triumphs. My selection of Lancashire was entirely impartial.
I hope that the Financial Secretary's decision to come to the House today of all days—the first possible day after the local elections—to seek the increase in borrowing powers means that the Government recognise that the mandate of the new Labour-controlled councils is clearer and more recent than theirs. I hope that the Government will not follow the recommendations of the Secretary of State for the Environment. We read in the Sunday newspapers that he regards all Labour local councillors as extremists and wishes to control local authorities even more tightly.
We object to controls on local freedom introduced by the Government. In introducing controls they are going against the long-standing Conservative tradition of respecting local democracy. In the 1970 Conservative campaign guide, we see the words of the right hon. Member for Sidcup (Mr. Heath) when he was Leader of the Opposition. He said of the Socialist Government:
They lose the argument, they lost the local elections, but they refuse to abandon their doctrines. Instead, they impose them by force on local representatives where democratic authority in these matters is clearer and more recent than their own.
What was good for a Labour Government and newly elected Conservative local authorities in 1968 is good for a Conservative Government and newly elected Labour local authorities in 1981.
The Financial Secretary said this year, as indeed he said on 6 May last year when he introduced the first of these orders, that the order by itself would not increase the public sector borrowing requirement, and of course we understand that. He said tonight that it does not affect the PSBR or the level of local authority loans in the slightest.
The House, however—and, I think, even the hon. Member for Chippenham (Mr. Needham) who, I note, is

not showing his usual assiduity in attending to the debate—needs to know why the authorisations of the Public Works Loan Commissioners have increased threefold, from the modest sum of £3,000 million that the Labour Government left to the Conservatives in 1979, to £6,000 million last year and £9,000 million this year. I note that perhaps the rest of the House takes a more relaxed view of the matter than those of us who remain here tonight. Nevertheless, by any analysis, those are substantial sums.
When the Financial Secretary spoke on this matter last year he said that he hoped that it would be "well over a year" before the Government sought a further increase in the order. It is, in fact, only a few days over a year. Why have the Government had to come back so soon for an increase?
Does the decision to ask for an increase of such a sum in the Public Works Loan Commissioner's funds herald a change in the Government's policy towards the methods by which local authorities raise their funds? Does it mean that the Government wish local authorities to raise a higher proportion of their capital requirements from the board rather than directly through the markets or through the sale of bonds? I note that the proportion of local authorities' total borrowings represented by Public Works Loan Commissioner funds rose from 23 per cent. in 1979 to 39 per cent. in 1980. Is it the Government's intention that that proportion should increase still further?
When questioned on the reasons for last year's order, the Financial Secretary said:
In so far as there is a shift from local authorities' borrowing from banks to borrowing from the board, that can assist monetary control."—[Official Report, 6 May 1980; Vol. 984, c. 239.]
Has there been a shift in borrowing from the banks to the Public Works Loan Commissioner, bearing in mind that borrowing from banks accounts for only about 18 per cent. of the total outstanding debt by local authorities? I should be grateful if the Minister would answer that as well. If that is not a reason for introducing the change, perhaps he will say what other reasons there are.

Question put and agreed to.

Resolved.
That the draft Local Loans (Increase of Limit) Order 1981, which was laid before this House on 16 April be approved.

TOWN AND COUNTRY PLANNING (MINERALS) BILL [LORDS]

Order for Second Reading read.

Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second reading committees), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — Town and Country Planning (Minerals) [Money]

Queen's Recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to make amendments relating to the winning and working of minerals in the Town and Country Planning Act 1971 and the Town and Country Planning (Scotland) Act 1972 and amendments relating to rights for the purpose of the conveyance of minerals in section 2 of the Mines (Working Facilities and


Support) Act 1966, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the said Act of the present Session in the sums so payable under any other Act.—[Mr. Thompson.]

Mr. Tam Dalyell: I do not know who the Minister is, but he seems not to be here.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Perhaps the hon. Member would like to continue. It is unusual for a Minister not to be present, but I think that he may be coming shortly.

Mr. Dalyell: I do not make too much complaint about such things, but there are issues to be raised on this motion. Partly, it is the concern of Lothian region relating to a report that we have received from our director of physical planning, who believes that there is considerable doubt whether the proposed subsection (3A) which clause 18 proposes to insert in section 19 of the Town and Country Planning (Scotland) Act 1972 encompasses the removal of material from waste retorted oil-shale bings.
It seems that this process is peculiar to the area of West Lothian and that the method of working oil-shale is such that the material eventually deposited in the bing may be seen as the product of an industrial process as opposed to a mineral working deposit. Consequently, a case may exist for the contention that the removal of material from a deposit of retorted oil-shale is not a mining operation and is not, therefore, brought within the limits of planning control.
It is suggested that to close this potential loophole an amendment might be forthcoming from the Government to clause 18(1) along the lines that a new paragraph (ii) should be added to the proposed subsection (3A)(a) to read:
from a deposit of retorted oil-shale; or
and that consequential amendments should be made to existing sub-paragraphs. I do not expect an answer from the Government tonight, but I undertook to the local authorities concerned to put that on the record.
There is considerable concern about the Bill because it imposes a duty on local planning authorities to review mineral planning consents. It also permits them to review and alter consents at five-yearly intervals, removing the operators' present entitlememt to compensation for alterations made with that frequency.
Although a few types of alterations remain fully compensable, these are types which can hardly be altered restrictively in any case. Although the Bill provides for modified compensation for alterations made, the scale of modified compensation is not contained in the Bill, and the intention is clearly that in making alterations the authorities will plan their revisions of consents entirely in the non-compensable area.
The effect of the Bill is to place the planning authorities under pressure and incentive to alter our planning conditions at five-yearly intervals, and whether they change them at five-yearly or at greater intervals the operator is faced with additional resultant costs and losses to which no maximum is set by the Bill.
Does the Minister agree that no maximum is set by the Bill? What figures are involved? The power given by the Bill to impose additional costs on the industry, without ceiling, may well be fairly objectionable.
Although these costs are not quantified in the Bill, we have taken account of the indications given to us by the Department of the Environment on the extent of the costs which, by the later issue of regulations by the Minister under the enabling powers of the Bill, they will for the meantime permit local authorities to impose on firms in the industry.
The proposal advanced by the Department is that the authorities will be able immediately to impose costs not exceeding 20 per cent. of the mineral value of our assets and to repeat such imposition every five years or possibly at somewhat longer intervals.
In principle, the imposition of a five- or ten-yearly regime on an industry which must take a long-term view of its operations and of its investment decisions is misconceived and represents, one might justifiably say, a trivialisation of the planning system. It does not fit the industrial policy of any party. It may represent an accommodation of dated and marginal environmental pressures, or the official interpretation of these at local or national level, without realistic assessment of their environmental benefits. Even if the industry could afford it, we seriously doubt that the measures capable of being exacted from the industry by the local authorities, in pursuit of this power to impose costs, will be of value to the environment.
The dated pressures which have led to the Bill relate to derelict mineral workings of a former era. Planning conditions now being agreed between mineral operators and planning authorities for current workings already represent the fullest exercise of the ingenuity of both the industry and the planners in contributing to the environment. In any case, the contribution to be made to the environment by tidy restoration of mineral workings is now quite unimportant in the total spectrum of environmental interest and frequently counter-environmental as regards genetic diversity. The proposals for more intensive control reflect the expired period of expanding government.
That view has been put to the Government by British Industrial Sand Ltd. and by other companies. There is a case to be answered. BIS states that the Bill is thus something of an anachronism and that its principal effect in return for the non-productive costs imposed on operators will be merely to make the administration of planning control even more complicated and expensive than it is already. The industry's main protest at this time against the Bill is an economic and financial one.
The industry states that it stands to forfeit up to 20 per cent. of the mineral value of its assets at every review. The total of this burden on the industry, for each review period, is calculated by the industry and the government alike at £100 million, which can be repeated. Although the industry fully appreciates genuine environmental advance and accepts that in times of reasonable prosperity it should meet part of its costs, it rejects the present imposition. Its customer industries are not able, it says, to absorb these non-productive and non-beneficial costs by way of increased prices.
The proposals as they stand can only lessen the industry's ability to employ its depleted labour force and to supply essential user industries. In current conditions the proposals, according to the industry, should have been suspended. Any legislation at this time should provide for an effective date after the recovery of the economy. Even in the best circumstances, a level of additional costs at 20


per cent. of the mineral value every five to 10 years is not supportable. The maximum burden that the industry could contemplate would be 10 per cent. arising at minimum intervals of 15 years. If this ceiling is to produce confidence and stability in the industry, the industry says that it should be written into the Bill.
This is a serious case. I have to declare a constituency interest, although it is not a personal one. Instead of automatically accepting the Bill, we should ask the Minister for the explanation that I am sure he is prepared to give.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): I shall comment on the points raised by the hon. Member for West Lothian (Mr. Dalyell). He mentioned the problems of the shale-oil workings in relation to his constituency. As he will understand, that is a matter for my right hon. Friend the Secretary of State for Scotland. Although the Bill has a remit over Scotland, I should wish to discuss the matter with my right hon. Friend before giving the hon. Gentleman a detailed answer in writing.
The hon. Gentleman has raised several important points on the two most obvious and outstanding matters—namely, the compensation formula and the formula's effect on the industry and, therefore, on the environmental pressures that the Bill seeks to apply to the restoration of mineral workings. In the past few weeks, significant discussions have been held with local authority representatives and with representatives of the CBI minerals committee in order to arrive at an agreed formulation for the compensation clauses.
The hon. Gentleman spoke of a significant 20 per cent. impost involving £100 million per quinquennium. That burden would add too significantly to the industry's costs and would be detrimental to this valuable industry. I can give the hon. Gentleman two assurances. First, the Government recognise the importance of arriving at a formula that is less destructive of the industry's potential than that which was originally discussed and quoted by the hon. Gentleman. Secondly, on reflection, we agree that some parameters to the compensation policy should be included in the Bill in Committee, if hon. Members so wish. It would be our intention to move in that direction if the Bill should reach Committee, which I sincerely hope it will.

Question put and agreed to.

Resolved,
That, for the purposes of any Act of the present Session to make amendments relating to the winning and working of minerals in the Town and Country Planning Act 1971 and the Town and Country Planning (Scotland) Act 1972 and amendments relating to rights for the purpose of the conveyance of minerals in section 2 of the Mines (Working Facilities and Support) Act 1966, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to said Act of the present Session in the sums so payable under any other Act.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp;c.)

NEW TOWNS

That the New Towns (Limit on Borrowing) Order 1981, a copy of which was laid before this House on 8 April, be approved. —[Mr. Le Marchant.]

Question agreed to.

Orders of the Day — Nuclear Shelters (Planning Applications)

Motion made, and Questions proposed, That this House do now adjourn.—[Mr. Le Marchant.]

Mr. Richard Needham: I am grateful that the House is prepared to listen to me at this late hour on this important matter of the Department of the Environment's approach towards planning applications for nuclear shelters. This matter causes great concern to both sides of the House, as can be seen.
The Government, in their guidelines on domestic nuclear shelters, have gone some way towards making clear what the public should or should not do in the event of the horrible possibility of a nuclear war. This has inevitably created considerable debate within the country as a whole. Obviously, the tensions in the world have heightened the debate and in some sense made the matter more immediate and, therefore, more important to debate.
The domestic nuclear shelters that the Government have proposed are all very well for those who are able to purchase them and have sufficient ground in which to build them. They do not, however, deal with the problems of those who live in high-rise flats or those who do not have cellars. Therefore, many people who cannot have domestic nuclear shelters might, in the event of such a holocaust, look for some alternative.
That alternative concerns me, because no solution has been offered by the Government for such people. Into this gap have come various companies, some extremely reputable and others not so reputable, which have offered some kind of solution to the question of people's safety in the event of war.
There is such an application in my constituency, before the local district council. It is in the name of a company called Rusepalm Shelters. I am not sure whether "Rusepalm Shelters" is a hidden pun on the confidence trick that the company may be attempting to play on the ordinary public or on the fact that the Russians may attack us.
In any event, the company, playing on the legitimate fears of many people, has produced a pamphlet to encourage people to take up shelters in an underground ammunition dump sold by the Ministry of Defence. The brochure, nicely printed, introducing the chairman, Maureen Whittart—who looks the part—states:
The main shelter will house up to 2,500 family units and there will be facilities for recreation and exercise, even during a nuclear attack.
One can imagine that such facilities would be necessary in such circumstances. It continues:
Among the apartment owners will be doctors, nurses, social workers, craftsmen, sportsmen, teachers and experts in many fields but, most of all, responsible people, with families, and the will to survive a nuclear war. This main shelter is constructed to provide safety for you, your children and your children's children. That the human race is meant to survive is proved every time a child is born.
I cannot argue against those sentiments. However, beneath the photograph which shows this complex is the caption:
All photographs taken prior to development.


It states:
The main shelter will provide the following facilities for communal use: Dining facilities for all main meals"—
which is lucky for those who wish to eat—
fully lit corridors; toilets; showers; laundry facilities; library which will contain a mini-computer programmed with survival technology, updated from time to time … The most modern and sophisticated electronic system for building services monitoring will be provided",
whatever that might mean.
Estimated survival of our population in the event of a nuclear attack is 43 per cent. Take advantage of this offer and you can be part of that 43 per cent.
Hidden at the bottom of the same page is the statement:
These apartments are offered subject to planning permission being granted. 99 year leases are offered for a capital consideration of £8,000 for a standard 13 ft by 14 ft four bunk unit. Mortgage facilities available—25 per cent. down, balance over five years".
It is monstrous that such a brochure should be presented to the public in such circumstances. One of my constituents in a letter to me said:
The exploitation of people's fears (aroused by very mention of the project) purely for personal monetary gain is peculiarly revolting. The applicants if ignorant of what nuclear war would mean are incompetent; if they do know they should be charged with fraud.
Let us consider the site. What about sewerage? That might be a problem in a nuclear war as it is a problem at any other time. It gets very little mention. What about air supply and filtration? There is little mention. I pass from internal problems and ask what about the external problems. How would people get there in the event of a nuclear war or the tensions preceding it? It is proposed to accommodate 10,000 people on the site, brought in from all over the country. How would they protect themselves from the locals, who, seeing the massive underground shelter where people had purchased places for themselves, would undoubtedly try to get in with their families? My locals are tough and strong. The yeomen of England live in the Chippenham constituency. They would make every effort to ensure that they and their families were properly protected.
What about the military bases in the area and the need to ensure that during times of such tension the military traffic and operations continued? In my constituency there are Copenacre, Colerne, Rudlow, Lyneham and Hullavington, to name but a few.
Most important, who would look after these people when they emerged from their bunker—if, in the interim, they had not been roasted alive? They could hardly expect to get into their cars and drive away. The cars would have been incinerated on the 41-acre car park.
Into this matter comes the local authority, which is presented with a planning application for the site. It is difficult for a local authority to determine such an application. There is nothing clear in planning law about how it should go about it. I have a letter from the chief planning officer dated 13 April, which says:
The type of considerations raised by this application are fundamentally different to those raised by the majority of applications.
He can say that again.
During peacetime one would expect little activity on the site. The activity and difficulties would occur in an emergency context, the exact nature of which cannot be accurately foreseen and the assessment of which must pose problems for a committee of a local authority".
The need for Government policy to be co-ordinated on the issue is clear. People are now trying to make money on the legitimate fears that many hold about their future.

As my hon. Friend the Under-Secretary can see from the glossy brochure that I have with me, those involved are trying to spread their views to obtain money. This is an illegitimate trade. It would be wrong to use the Government's proposals on domestic nuclear shelters to try to advance arguments for massive underground shelters.
I am talking about old quarries that have been used over the years as ammunition dumps. They contain a few old machines with their innards left rotting. The quarries have been taken over by speculators, whose plans have been thrust upon the public.
The Government must co-ordinate a policy towards such shelters. They cannot rely on the local authority, which in this case is faced with a planning application for a site in the middle of a farm. It would not create a large number of above-ground problems in its construction, and when the authority looks at the regulations it may find considerable difficulty in turning the application down.
Therefore, the Home Office and the Department of Trade must come together to set the standards and specifications for such shelters. The Department of the Environment must issue instructions on placement and access. The matter cannot be left to the whim of a district authority.
This debate is very important to my constituents, who have genuine fears about what will happen to them if such a horrific eventuality as we are considering comes about. I hope that my hon. Friend the Minister will make it clear that the Government are determined that such disgraceful proposals as are being put forward by Rusepalm will not go without proper condemnation and criticism.
I ask the Government to examine the matter seriously and ensure that such an application is at least called in. I ask that they will then, in line with their policy document on domestic nuclear shelters, provide guidelines and instructions on the much larger shelters that may be needed for those living in flats or houses with no gardens or cellars. I ask my hon. Friend to make clear where the Government stand and how they intend to operate.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): My hon. Friend the Member for Chippenham (Mr. Needham) has raised a matter of considerable importance to his constituency—one that goes far wider than normal constituency questions. The subject of tonight's debate raises issues far beyond those normally found in planning applications. The question of civil defence, which is not the least of those issues, is of course entirely the responsibility of my right hon. Friend the Home Secretary. I make no apology, therefore, for quoting my right hon. Friend during this debate.
The proposal to which my hon. Friend refers concerns the adaptation of extensive underground storage areas, now disused, for use as a communal nuclear shelter. The storage areas were originally Bathstone quarry workings. During the late 1930s the old workings were acquired by the then War Department. They were reconstructed and refurbished and made into a vast, fully serviced, underground complex of dry storage space. The complex was used for the storage of all types of ammunition until 1967, when it became surplus to the Ministry of Defence's requirements. In 1975 the site was put up for sale, and the


sale included along with the underground storage complex, over 40 acres of land, together with a variety of buildings on the surface.
The site is in a rural area, east of Bath and west of Chippenham. The surrounding area is agricultural, but not within a designated area of outstanding natural beauty. At the time of the sale, Wiltshire county council, as the local planning authority, indicated that it would be prepared to consider future uses for the property for agricultural purposes and also for the warehousing and storage of certain unspecified types of goods.
Sale of the property was completed in 1976, and the site is now owned privately. As my hon. Friend spelt out, a planning application has been submitted to the North Wiltshire district council, which is now the appropriate local planning authority, to use the site for emergency residential accommodation.
This would be a commercial venture. My hon. Friend suggested that the terms of reference in relation to the application made to members of the public were a matter which should involve consumer protection activities and my right hon. Friend the Secretary of State for Trade. No doubt my hon. Friend will consider such movements as well as raising the matter in this debate in connection with the planning application.
It is intended, apparently, that the underground storage areas should be converted into small residential units in which up to 2,500 families—perhaps as many as 10,000 people—would be able to live for up to three months in the event of a nuclear attack. Family units are apparently to be offered for sale on a 99-year lease at £8,000 each. there would also be extensive communal underground facilities for the residents.
As I am sure my hon Friend knows, the Town and Country Planning Act 1971 places on the local planning authority for the area the responsibility in the first instance for determining planning applications. The Act contains provision for the Secretary of State to direct that an application should be referred to him instead of being dealt with by the local planning authority. The overwhelming majority of planning applications, however, raise issues which, though they may sometimes be controversial, are primarily of local importance. Accordingly, it has been the policy of successive Governments that applications should be called in for the Secretary of State to determine only if they raise issues of more than local importance, and even then only if there are strong reasons why the decisions should not be left for the local planning authority to take.
The case to which my hon. Friend has drawn attention is clearly one of some difficulty. He could argue, as he has done persuasively, that the matter which is of concern to him is greater than that of a merely local planning issue. However, he will recognise that the local planning authority has powers available to it to determine the planning application on grounds such as sewerage, air supply, filtration, or transport in terms of access to and from the development. In other words, there are many aspects of this planning application which are not in themselves unusual for a local planning authority which has to deal with problems of this kind.

Mr. Needham: Does not my hon. Friend accept that in this instance it is not so much a matter of what the ordinary run of events will be? It is how such an application should be considered in use during the event, either immediately preceding or after a nuclear war. The

local authority concerned cannot conceivably know exactly what the position will be, either in terms of sewage or in terms of access and, least of all, in terms of what the local surrounding conditions will be. Therefore it is not just a consideration which the local authority can deal with. It will have a much greater impact on and significance for the country as a whole, and I am sure that my learned Friend will deal with the disgraceful way in which this proposal has been presented to the public.

Mr. Shaw: But my hon. Friend touches immediately on the question which overlays his anxiety in this instance. It does not concern the planning application so much as the relevance of the application to the problems involved in nuclear dispersal, nuclear accommodation or the consequences of a large population unit surviving a nuclear attack. I suggest that these are matters which are not in themselves the responsibility of the planning authority or the Department of the Environment but probably are the responsibility of the Home Department in terms of the advice which it should be able to offer as the co-ordinating Department in these matters.
I accept that my hon. Friend has raised what I consider to be a matter of some importance, in that there could be for local planning authorities the requirement to determine an application in good faith relative to local planning requirements and to the 1981 conditions under which they operate, which somehow transfer them, given the possibility of nuclear attack, into realms where they have not either the relevant experience or where, perhaps, they lack the relevant advice. I understand my hon. Friend's emphasis on those aspects of this application.
Of course, the matter fundamentally relates to planning for nuclear conflict or nuclear fall-out. My hon. Friend will know that the Home Office is the main Department concerned. The local planning authority will clearly want to consider carefully many of the aspects relating to nuclear policy before determining the application. I know that it has sought advice from the Wiltshire county emergency planning officer. But these planning issues, while I admit their importance, are essentially matters on which the local planning authority concerned is still best placed to reach a decision.
Civil defence is, of course, a different matter. It may be helpful if I say a few words about the subject. Before doing so, however, I must stress that I can offer no opinion tonight, one way or the other, on the planning merits of this application, although I have taken on board my hon. Friend's anxiety about the terms under which this offer is being made to members of the public. I shall draw the attention of my right hon. Friend the Secretary of State for Trade to the matter and invite his comments on it.
There is of course nothing new about communal shelters. A great many were constructed for use in the Second World War, and some of these are still in being. My right hon. Friend the Home Secretary announced in his statement on civil defence to this House last August that the Government propose that
a survey of existing structures suitable for communal shelter purposes should be conducted".—[Official Report, 7 August 1980; Vol. 990, c. 793.]
A survey of this type is a rather more complex matter than may be generally appreciated, and while a possible approach to the task has been carefully developed over the past few months, the Home Office has yet to discuss with the local authority associations, as my right hon. Friend undertook, how best to carry out the survey. I cannot,


therefore, say tonight how the workings, subject to the planning application, might rank in the results of the survey.
Naturally, if they were to be successfully adapted to shelter use their significance would be enhanced, but even then their precise ranking in the war emergency plans which Wiltshire county council is obliged to prepare under the Civil Defence (Planning) Regulations 1974 would be essentially a matter for that authority. In exercising its judgment in the matter the council would take account of local opinion.
In response to public and parliamentary interest, the Government have published in recent weeks detailed guidance on the construction of domestic nuclear shelters. However, contrary to suggestions in some quarters, the Government are not advocating the acquisition or provision of nuclear shelters, whether communal or domestic. The Government are certainly not offering special financial incentive, by way of tax or rate rebates or outright grants.
It is commonly overlooked that most houses in this country offer a reasonable degree of protection against radioactive fall-out and that protection can be substantially improved by quite simple measures. The material is ready now, should the need arise, for an intensive publicity campaign on television, radio and in the press, informing people what they can do quickly to effect the improvement and what other steps to take to increase their prospects of survival. The booklet "Protect and Survive" was designed to supplement this campaign. The plan has been for rapid printing and circulation in a war crisis at a time when its impact would be greatest. In keeping with this Government's belief that the public has a right to information about civil defence, and the likely effects of a future war, the booklet has been made available to the public and for the last 12 months has been on sale through Her Majesty's Stationery Office. There are copies of the booklet in the Library, together with copies of the Home Office guides on domestic nuclear shelters and on nuclear weapons. The "Protect and Survive" measures, simple though they are, could enable millions of people to survive who would otherwise be killed.
This proposal, if it went ahead, might encourage a section of the population, in the event of an emergency,

to move out into rural areas to seek shelter. The Government's advice, however, is that in a crisis people should stay put. The implications of applications such as this one for national civil defence policy are clearly of wide interest, and I give my hon. Friend an undertaking that I shall involve my hon. and learned Friend the Minister of State, Home Office in discussions on the matters raised in this debate. He is right to alert the House to this issue, and I shall see that it is properly drawn to the attention of those who are responsible in the Home Office.
In addition, if the local planning authority dealing with the application has any specific questions on national civil defence policy relating to the application I shall ask the Minister of State to consider what advice might be offered.
In relation to the Department calling in the application, what has been said is important. I have not given the undertaking which my hon. Friend sought. I cannot leave the matter there. I should like to consider the issue and discuss whether there is ground for calling in the application. I am not persuaded that the ground, in terms of local planning requirement, is such that it requires the Secretary of State to act under section 35 of the Act and call in the application, although significant planning elements are associated with the application.
My hon. Friend raised the question of how a particular application fits into the Government's advice on planning for nuclear emergencies and whether advice should be given to local authorities about the way in which they handle such applications. That is not the same as saying that the planning aspects of the application are such that they warrant the Department taking action under section 35.
I shall write to my hon. Friend after I have had more time to consider whether action should be taken on the planning merits. I have said sufficient to show that I believe that my hon. Friend has raised a matter of considerable merit. I understand why he has raised the topic. The issue requires slightly more consideration than I have been able to give it before determining my Department's view. Discussions with the Home Office are relevant and necessary.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes to One o' clock.